SRA ‘unlikely’ to relax ABS restrictions
The Solicitors Regulation Authority is unlikely to relax its rules on allowing firms to enter into deals with other businesses in advance of the licensing of alternative business structures, a paper prepared by the regulator has indicated.
The paper, which will be discussed by the SRA board this week, suggests that the profession would be ‘confused’ if the ‘clarity of the message in the [SRA’s] guidance of July 2009 is watered down in any way’.
It adds that ‘a bright-line position is clearer for the regulated community and for the public’.
Rather than relaxing the guidance, the SRA is instead expected to focus on providing assistance and support to firms in relation to their alternative business structure plans. However, the paper notes that there has been ‘some limited pressure’ on the SRA to relax the rules.
According to the SRA’s July 2009 guidance, law firms may have discussions with potential ABS business partners, and may enter into non-binding agreements, as well as registering company and domain names.
However, until ABSs are permitted on 6 October 2011, the rules do not permit solicitors to enter into any arrangement that would involve selling any part of their ownership interest, or that would put their future business partner in de facto control of material decisions about the business.
Comments
ABS business partners
SRA rules might be strict to start off with but will inevitably slip and slide all the way as pressure from the money masters is tightened.
Conveyancing from £99 in a low volume market? Even in a high volume market the maths do not add up at those rates. Look at the LLPs that have already gone to the wall working with impossible business plans. What will the situation be like under ABS Law?
Family law, company law and employment law will all be turned into peanut farms manned by low calibre unqualified staff. This of course happens today to a lesser extent in pre-ABS firms but the situation will descend into farce very quickly when the corporates expand the model. Satarists will have a new area for their trade - dumb and dumber law.
ABSs are a disaster waiting to happen. LLPs (Limited Liabilty) may afford the partners some comfort under the current regime but what will the insurers think of an ABS where profit for the shareholders by cutting costs will be the inevitable survival formula.
Make way for lawyers working at weekends and unsociable hours. A mass of headset women being used as cheap labour as usual. Uniformed staff with name badges supervised by a handsome man wearing a top man suit.
I am sure the websites of the ABS firms will contain patronising testimonials such as:-
Charmine held our hand throughout the divorce process and constantly asked about my pregnancy. I would recommend Charnine to any of my friends having a divorce.
More importantly did Charmine know anything about the law and would a highly educated well remunerated arogant lawyer have achieved a better settlement for Charmine despite lacking Charmines people skills.
Would any client work after contracted hours to get a job done (especially in the public sector) and do people really respect people who work for humble wages even if they are socially intelligent and superficially good at the mechanics of the job.
In the retail sector a potential customer might be swayed by a shiney box or a poster showing an attractive person living a shiney life style. The law is and should not even be the distant relation of such a low minded approach.