An innovative project to help smaller law firms work together to become more competitive has been launched in the north-west. The initiative could involve around 10 Greater Manchester firms setting up a single management company to manage shared support services to help them prosper in the post-Legal Services Act environment.

Law firm consultancy Inpractice said it is exploring how firms employing fewer than 50 people can restructure their businesses to reduce costs.

Inpractice director Allan Carton said: ‘The conventional way in which many small firms currently operate, with limited resources and investment, that limit innovation, cannot be sustained as margins get tighter.’

He said that collaboration, involving sharing the cost of support services, would be a viable alternative to merger or acquisition. However, issues ranging from compliance and confidentiality, to avoidance of conflicts, professional indemnity and security, would need to be addressed before any initiative could become reality, he added.

The project was initiated by Manchester Law Society, the north-west regional office of the Law Society, Greater Manchester Chamber of Commerce and the North West Development Agency. Law Society regional manager for the north west Joanne McLeod said: ‘We believe this is the first venture of its kind. Firms, especially smaller firms, are facing challenging times, and we hope this project will identify new ways for them to move forward to a brighter future.’