Investec is targeting opportunities offered by the Legal Services Act (LSA) with the launch of a unit that will invest up to £10m in law firms.

The South-Africa based bank has set up a professional services finance unit which will invest up to £10m per law firm in those looking to grow and take advantage of the LSA via the use of alternative business structures (ABS).

The unit will be led by Investec's Jonathan Harvey, with the funds available to the UK's biggest 100 firms by turnover.

Investec will not take a stake in firms in return for the investment, or have any say in management decisions.

Harvey said: "It is an exciting time for the legal industry, with a lot of change set to occur. There is simplicity to traditional financing which sees a two-partner firm having the same financing facilities available to them as a large law firm, albeit on a different scale.

"This has worked well to date, but we are entering into a different world with regulatory changes allowing for outside competition and external investment. We can provide more specialist finance on a debt basis for firms looking to change their businesses."

He added: "We have come across a number of firms thinking about changing their business models and growing the firm going forward. The more innovative a firm is now, the more successful we think it will be in the future."

Alternative Business Structures (ABS) – often dubbed 'Tesco Law' – permit companies to invest in law firms and provide legal services outside of traditional partnerships. They will come into effect from October 2011.