'Upsurge' in Scottish firms interested in ABS status
The Law Society of Scotland has reported an upsurge in law firms north of the border expressing interest in becoming alternative business structures, though it says new regulations enabling them to convert remain ‘some way off’.
Today the Society has submitted a proposed regulatory framework for ABSs to the Scottish government, confirming its intention to apply for ‘approved regulator’ status.
Under the Legal Services (Scotland) Act 2010, solicitors will be able to set up in partnership with other professionals to provide legal services in Scotland. Unlike in England and Wales, ABSs north of the border must have majority ownership by solicitors and/or other regulated professionals, such as accountants or surveyors. In Scotland, ABSs will be known as ‘licensed legal services providers’.
The Scottish government needs to bring forward additional regulations before the Society, or any other interested party, can apply to become an approved regulator of new legal services businesses. A recent spate of cross-border mergers has increased pressure on both the society and Holyrood to bring in the necessary reforms.
Phillip Yelland, director of regulation at the Law Society of Scotland, said: ‘We are hopeful that the Scottish government will confirm it is content with the direction of travel we’re going in with our draft regulatory scheme so far. However we are limited in what we can do until the government introduces regulations on some key issues such as spent convictions, similar to those promulgated in England and Wales, and regulations relating to investors, to allow us to flesh out our draft regime for limited partnerships in Scotland.’
Yelland said there had been growing interest from firms, with increasing numbers contacting the Society to ask about becoming a licensed provider.
He said: ‘There has been an upsurge of inquiries from solicitors’ firms, both large and small, who are considering how they might develop their existing business model under the legislation.
‘You only have to look at what’s happening in the marketplace with the number of recent cross-border mergers to realise that solicitors are considering what the best model is for their business moving forwards and ABSs are part of those discussions.
‘As a regulator, we want to see consistency of regulation and standards. All individual solicitors will continue to be regulated by the Society and I think it’s important that we can also regulate new types of legal services businesses to ensure that there is consistency right across the legal services sector. This will be beneficial both to the profession itself and to members of the public looking for legal advice and services.
He added: 'While we don’t have control of the timetable as to when ABSs will come into being, we are making progress and it may be that by the end of the year we start to see the first ABS applications. We would encourage any interested parties to get in touch with us to have a confidential discussion about their potential plans for the future. This will help our development of a regulatory regime and also mean that if we think that what they want wouldn’t be permitted we can have discussions about that at an early stage.’
The Society declined to speculate on when ABSs will actually become a reality in Scotland. A spokeswoman said: 'Unfortunately there is no date identified because until all the necessary government regulations are in place we cannot submit a final model and it will only be at that point that any actual date might be capable of being suggested.'
Comments
ABS's
Like them or loathe them, ABS’s are here to stay. Like an invisible tattoo on the forehead of every member of the legal profession, you may not be able to see them on yourself, but just look into the mirror of life.
I urge you to repeat them until you know them off by heart. Pull them, stretch them and they just bounce back into shape like rubber toys. ABS is one phrase that you can’t misinterpret or reinterpret in a way to simply suit yourself.
So, you’ve decided that you are going to play ball and embrace alternative business structures. The cold fact is that you have no alternative.
David Taylor, the chairman of the Membership Board of the Law Society addressed the Minority Lawyers Conference in Chancery Lane where the liberalization of legal services was being widely discussed. He said, “These solicitor reforms cannot be ignored. In five years’ time, legal practices of all types are going to look very different with the implementation of alternative business structures.” He continued “If solicitors are going to thrive, they need to be active participants in the future.” He chose his words precisely.
He referred to the reforms set out by David Clementi. He further indicated that the restricted availability of finance to businesses indicated reluctance in venture capital firms to invest in legal practices. In short, you are viewed as a bad risk.
He highlighted the fact that many firms may seek external capital by bringing in solicitors with other skills into their partnership, but others see it as the devil’s work. He went on to say that Solicitors have everything to play for.
Reference was made to the belief that many solicitors will be driven out of work by the provision of legal services at less than the actual cost. But he said, “They wouldn’t be able to recoup their losses because other suppliers would move in to undercut them” (e.g. Tesco).
However at that very same session, David McGrady claimed that the Institute of Legal Executives had most to gain from ABS’s. He further commented that Legal Executives have been supported by ILEX in their application to be given independent rights in areas of Criminal Law, Civil Law, probate and conveyancing.
All in all the future will be probably far different and more radical than all of the speakers actually realise. No more will the administration and interpretation of the law of the land remain the privilege of the few. It is about to become as different within the next five years as it differs today from the law of the fifteenth century.
Within our lives we will remember with some agitation ‘the way it used to be’. Change and you will prosper. Dwell in the past and you will remain in the past.
The Future
More free advertising. The future is factory farming. Neat uniformed paralegals in an open office churning out processed work and taking it in turns to read updates from a central computer system to the customers. A standardised service for easy jobs. Inevitable since Land Registration and soon to be here now. Anything else will fail. I don't need slick snake oil merchants to witter on about a wonderful future for all qualified solicitors. Nor do I need them to quote members of a Law Society which long ago abdicated leadership of the profession in favour of licking the boots of the City of London and New Labour.
Garbled nonsense from someone
Garbled nonsense from someone who fancies themselves an intellectual but never quite grasped, the English language, structure or reasoned argument.
By the way, your comparison site, seen hundreds of them over the years and all have failed.
ABSs are the future. Anyone
ABSs are the future. Anyone who doesn't agree will not make me profit, sorry, will not embrace the full liberalisation and coneptualisation of the efficiency drive [continues on using another 100 management speak buzz words, downloaded from a google search].
You'll go bust, but if you come to an inspirational talk / marketing talk / use my shitty website / pay me money, you'll make loads of profit.
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