The SRA has finally granted permission for private equity firm Duke Street to invest £50 million in law firm Parabis, potentially clearing the way for a revolution in law firm business models.

Parabis handles claims management work through its subsidiaries Plexus and Cogent, and the firm has been trying to convert to an Alternative Business Structure (ABS) for several months. It says the funding will enable it to pursue ambitious expansion plans (and no doubt fund more branded t-shirts and visits to music festivals for its staff).

But will this really change the way law firms are owned and funded? Well, for those firms whose business models focus on commoditised work  and for whom economies of scale can make a huge difference: could be. But it seems less likely for those firms whose value is based on the individual skills of their own lawyers, who generally choose to work in private practice because they like owning their own business (and the profits associated with that). Don't expect Slaughter and May to start pimping itself out for private equity cash any time soon.

A paradigm being shifted (artist's impression)

It was originally planned that the deal would close way back in February. Clearly that timetable was all a bit much for the SRA, which needed another six months to do whatever it is the SRA does grant the licence allowing the ABS conversion. So now Duke Street can invest in a chunk of the equity, and get the firm to snap up other firms, slash costs, ramp up profits and flog (or float) the whole thing for a massive profit in five to seven years before it all explodes. Hooray!