The head of global legal giant DLA Piper warned this week that a ‘paradigm shift’ is about to hit the sector.

Sir Nigel Knowles (pictured), joint chief executive of the firm, predicted many firms will flounder in the next 10 years after alternative business structures (ABSs) arrive in October.

‘They (ABSs) are going to kill off the commodity firms at the bottom of the food chain. I don’t think they have any inkling of what is going to happen to them – competition will intensify and it will have a knock-on effect,’ he declared.

Knowles, managing partner since 1996, said firms need to have spread themselves geographically and established a range of expertise if they want to survive.

‘Firms that don’t have a plan are going to find life extraordinarily difficult as they have nothing to sell and no point of differentiation,’ he added.

‘That is where mass consolidation is going to take place in the next five to 10 years and some firms will drop so far down they will never recover, while some will merge – and it’s about time.’

The DLA chief ruled out the possibility that DLA Piper will be one of the firms to seek external capital or float on the stock market when the ABS reforms are implemented.

Knowles said: ‘Listing for us would be far too complicated and we would not be giving the partners of tomorrow the same future.

'We’d be accused of selling the family silver. Even though it would be good for one or two of us personally, it would be wrong for the business.’

Introducing the firm’s latest financial results, Knowles said DLA Piper’s intention is to move further into untapped global territories, in particular South Africa, South Korea, Canada and, eventually, India.

This follows a year in which new offices were established in Turkey, Brazil, Portugal and Venezuela.

He added: ‘Although it sounds corny, law firms have to follow the money and go to the markets clients are investing in. There is a trend, which is that growth is expanding south to South America and east to China.’