Selling the practice to a tech owner
An AI law firm or legal tech company wants to buy my practice
Updated
A buyer that is not a lawyer can own a practice in England and Wales, but only through a licensed body the SRA has approved.
Short answer for the selling partner
It can, through a licensed body. Under the Legal Services Act 2007 a firm in which someone who is not a lawyer is a manager or holds an interest is a licensable body, and the SRA must approve a non-lawyer's material interest in it. A software company buying the practice therefore buys into a regulated structure, not around it. This page explains the rules; it is not legal advice on a sale.
What a licensed body is
The SRA calls a licensable body it has authorised a licensed body, also known as an alternative business structure. It needs at least one lawyer manager alongside the non-lawyer manager or owner, and the SRA's own rules require approval of anyone holding a material interest in it.
Recent buyers of UK practices
Carta, the software company behind an ERP for private capital, announced that it had acquired Avantia Law, now Carta Law. Lawfront Group, backed by the private equity fund Blixt, was joined by Field Seymour Parkes in Reading. Knights announced it was buying Moore Barlow's commercial and private wealth business. None of the three announcements we read publishes a price.
Source: Who has bought UK law firms
The client files do not change hands freely
Selling the practice does not end the duty of confidence owed to its clients. The SRA treats any use of a client's information other than for that client's benefit as needing the client's consent, so a buyer planning to train AI on the files is in the same position as the firm was.
Questions for the buyer
- Will the buyer apply to the SRA as a licensed body, or join one that already exists?
- Who will be the lawyer managers, and who holds the material interests?
- What does the buyer plan to do with closed matters and client documents?
- Would a licence of the firm's own data, kept separate from the sale, serve the buyer as well?
If the interest is in the firm's records rather than its clients, describe what you hold on the enquiry form.