Alternative Business Structure (ABS) applications

Unlocking external capital and non-lawyer expertise

The introduction of the Alternative Business Structure (ABS) transformed the English and Welsh legal market. By allowing non-lawyer ownership and external investment, an ABS enables law firms to scale rapidly, acquire new technology, or reward key non-legal staff—such as Finance, IT, or HR Directors—with equity stakes.

However, the SRA’s scrutiny of ABS applications is intense. The regulator requires absolute confidence in the financial stability of the proposed entity. As the only accountancy firm working in partnership with the Law Society, Armstrong Watson provides the rigorous financial modelling and strategic business planning required to ensure your ABS application succeeds.

Building a watertight financial case

The SRA requires detailed evidence that your new ABS is financially viable and that client money will be protected. As a founding partner of Law Firm Ambition, we work directly with your management board to build a compelling submission:

Robust Financial Forecasting: We build the mandatory three-year financial forecasts, complete with stress-tested cash flow models and profit & loss projections, proving the commercial viability of the new structure.
Working Capital Modelling: We demonstrate to the SRA exactly how the ABS will be funded, clearly outlining lock-up management, partner capital, and the deployment of external investment.
Business Plan Development: We help you articulate your strategic rationale, ensuring the narrative of your business plan aligns perfectly with the financial data submitted to the regulator.

Supporting external investment

If your ABS application is driven by private equity or external funding, we provide the corporate finance expertise needed to structure the deal. We assist with firm valuations, due diligence preparation, and tax structuring to ensure the incoming investment is deployed efficiently.

How long does the process take?

The whole process on average takes around six months, however, it could be longer or shorter depending on the complexities involved and SRA suitability decision.

Key contact

Andy Poole

Corporate Finance Partner

Contact Andy

Our fees to support your ABS application

We have supported a number of firms with their application to become licensed as an ABS.

We will help you to understand the process involved in the ABS application, and whether you should decide to proceed. We’ll manage the process from end-to-end, ensuring a smooth and seamless application.

We will provide fixed fees for each stage of the application process in advance which will be dependent on the level and scope of our required input:

Initial assessment meeting to consider the application process; to understand what is involved and to assist with the decision whether to apply
Conversion/application checklist meeting to provide our 12 page conversion checklist that details tasks that need to be undertaken during the process; to allocate those tasks to specific people at the law firm or at Armstrong Watson; and to set deadlines for those tasks to be completed.
Provision of a soft copy of the checklist, updated by Armstrong Watson on a monthly basis with accompanying notes of tasks that are required to be completed in the following month.
The following are usually carried out, but are subject to the allocation of tasks in the checklist meeting:
- Provision of the SRA application forms for both the practice and the individuals, with guidance on how to complete the forms
- Creation of the chosen structure vehicle
- Review of the SRA forms prior to submission to the SRA
- Preparation, or review, of integrated financial forecasts prior to submission to the SRA
- Review and sense check of business and continuity plans and risk analysis and assessments prior to submission to the SRA
- Introductions to other advisers that will be required in the setting up of a new law firm, including legal sector specialist Professional Indemnity Insurance brokers, regulatory advisors, sector specific software providers, marketers and funders

£890 + VAT* and disbursements for the initial assessment and planning meeting.

This is a fixed-fee, payable-in-advance option. Additional fees will be agreed following the initial meeting before any further services are provided. All services are delivered remotely via video conferencing; however, face-to-face options are available if required.

*£890 + VAT applies to existing law firms looking to convert to an ABS. For entirely new law firm ABS applications, the fee is £1,865 + VAT, which includes a comprehensive law firm start-up checklist.

Administration fees

The SRA’s administration fees for processing applications are as follows:

Recognised Body or Sole Practice: £200
Licensed Body (ABS): £2,000 (plus £150 for each individual or entity requiring approval).

Exceptions

Alternative Business Structures are currently only available to law firms in England and Wales. While the Regulation of Legal Services (Scotland) Act 2025 has recently updated the framework for Licensed Legal Services Providers (LPs), the formal timescale for these to become operational in Scotland is still being determined by the relevant regulatory bodies.

Subscribe to
The Law

The LAW is our online newsletter for the legal profession, produced by our legal sector team. It provides a platform to share our experience of supporting lawyers across the UK.