Peter Williamson discusses the remit of the legal services board and how he expects it to oversee regulation


The announcement that David Edmonds is to chair the Legal Services Board (LSB) probably signified little to many lawyers.



My impression from talking to solicitors is that most are hazy about the intended role of the LSB and how its work might affect the regulation of their profession. But the appointment of Mr Edmonds, who clearly has impressive credentials, is very important to the future of legal services.



The LSB is an outcome of the Legal Services Act. It will supervise the regulation of legal services by all regulators, including the Solicitors Regulation Authority (SRA) and the Bar Standards Board.



The act obliges the LSB to ‘have regard to’ the principles of good regulation – transparency, accountability, proportionality, consistency, and the targeting only of cases where action is needed. The LSB will have to ‘assist’ in the maintenance and development of standards of the approved regulators, and the education and training of those authorised to conduct reserved legal activities.



Parliament has made it clear that consumers of legal services – both corporate and individual – should be a powerful influence on the LSB. There will be a consumer panel to represent their interests. It will be entitled to publish details of its representations and advice to the LSB. If the LSB disagrees with its consumer panel, it will have to give its reasons.



The LSB will not be entitled to interfere with the representative functions of an approved regulator (in our case, the Law Society), but it will have a duty to ensure that the work of an approved regulator is not ‘prejudiced’ by its representative functions. Decisions about an approved regulator’s functions are, ‘so far as reasonably practicable’, to be taken independently from decisions about its representative functions.



The Law Society has already separated its regulatory and representative functions and should shortly delegate its rule-making role to the SRA, something that has been legally possible since March. It will be for the LSB to consider whether these arrangements are adequate.



Now that the chairman of the LSB has been appointed, the next question is who will sit on the board. The composition will be intriguing, but in my experience you cannot predict the style of a decision-making body by analysing who sits on it. The SRA board (nine solicitors, seven lay people), for instance, hardly ever divides on lawyer/non-lawyer grounds. I would expect at least some people with outstanding consumerist credentials to be appointed, because that would be consistent with Parliament’s intention. It is likely to be early 2010, though, before the LSB is empowered formally to supervise approved regulators.



But new legal disciplinary practices (LDPs) do not have to wait until then. LDPs will be a new form of practice, owned and managed by a variety of lawyers, and could include a minority of non-lawyers. We are working hard to enable LDPs to start in March 2009.



However, we do have to wait for the board to be empowered and to have worked out a licensing scheme before alternative business structures (ABSs) can start. ABSs will allow lawyers to form multi-disciplinary practices with other kinds of professionals, such as accountants. They will also allow non-lawyers to own firms that provide legal services. The concept has become known as ‘Tesco Law’, though as far as I know that supermarket chain has not said it intends to own an ABS. Once the LSB has worked out the details, regulators like the SRA will have to apply to it to become a licensing authority. It is likely to be 2012 before ABSs start to operate.



During the coming years, as LDPs and later ABSs start, the SRA will have to shift its focus to regulating firms operated by a variety of lawyers and non-lawyers, as well as individual solicitors within them. The shift promises to be every bit as challenging as it sounds.



So what sort of LSB do we want to see?



Most of all, we hope for a listening LSB, which considers the views of all interested parties – in particular the public and the regulators who are working to protect consumers, and the providers of legal services – before reaching reasoned decisions. We would also like to see a board that takes the long view and gives clear strategic direction; a board that recognises that sometimes the wider public interest in the rule of law has to take precedence over consumer interest; and a board that resists the temptation to micro-manage, but which holds regulators robustly to account.



We expect the LSB to insist on regulators being – as the act intends – free of improper interference from the representative bodies, but which also understands that regulation can be effective only if it is in partnership with the profession. This reflects the SRA board’s approach to regulation.



We recognise that there could be circumstances where the board feels it has to intervene in the work of a frontline regulator to protect public confidence. However, we trust this would happen only as the last resort. The SRA will work with the Law Society to avoid this.



The SRA undertakes to deal with the LSB with integrity and to do its utmost to protect public confidence in the regulation of solicitors and their firms. Without reserve, we wish Mr Edmonds and his colleagues every success.



Peter Williamson is chairman of the board of the Solicitors Regulation Authority