The Ministry of Justice has launched a pilot initiative in partnership with City law firms and charitable trusts to test a new business model for law centres.

The project will harness City firms’ know-how to ensure law centres across the country are run in the most efficient way possible.

The project, formally announced by justice minister Lord Bach (pictured) at South West London Law Centre (SWLLC) last week, will also identify potential sources of funding for different aspects of law centres’ work. The MoJ has allocated £235,000 to the scheme, while private funders including magic circle firms Allen & Overy and Clifford Chance, and City firms Herbert Smith, Lovells and Simmons & Simmons, have donated £80,000.

The scheme was devised after SWLLC faced closure due to financial difficulties. The MoJ and the Legal Services Commission offered support to help keep the service open.

Over the last three months, the MoJ has worked with the Law Centres Federation, Allen & Overy, the Barings Foundation and the London Legal Support Trust to develop an action plan for the centre.

That has included examining the cause of the centre’s financial difficulties, designing a strategy for its recovery and using that plan to develop a new business model that can be used across all law centres.

Bach said: ‘By working with the SWLLC, we can study the challenges faced by law centres across the UK and develop more sustainable operations and working methods that can be employed by law centres everywhere.’

Julie Bishop, director of the Law Centres Federation, said: ‘This is an unprecedented partnership which will have real benefits for law centres’ clients as they struggle to cope with the impact of the recession – and will also give the government value for money.’

Susan Hazledine, head of social investment at Allen & Overy, said: ‘The future of civil legal aid relies upon the sector’s ability to find creative ways to establish a quality, value for money service within the scope of the fixed fees structure.

‘The support and expertise that firms like Allen & Overy can contribute will go a long way in helping to establish a blueprint of best practice that can be replicated at law centres across the country.’