Reviewing the White Paper on implementing the Clementi reforms, Janet Paraskeva welcomes moves towards MDPs, while saying the society will lobby to prevent any further financial burdens being placed on the legal profession

The Lord Chancellor has now published the White Paper setting out his plans for implementing the Clementi agenda of reforms to legal services. Lord Falconer’s approach contained few surprises, but there was one area where it went further than Clementi. In a section on alternative business structures (ABSs), the way is opened to multi-disciplinary practices, firms that can offer not only legal services, but associated services, too – an innovation the Law Society has long promoted.


Of course, there is a lot of work to do now in preparation for the new regime, and the Law Society has been working for some months on the ways that ABSs might be regulated. Our aim is to ensure that the opportunities that the new practice models present are appropriate for solicitors. That means a light-touch regulatory approach that nonetheless provides consumers with the assurances that they rightly demand. Much has been made of the possibility of external ownership of firms, with some perceiving it as a threat to the independence of the lawyers employed. But with the appropriate safeguards in place, the opportunities are huge for the legal profession to benefit from fresh investment to fund new ways of delivering services.


The day after the White Paper was published, I was a guest speaker at a very timely conference for members of Law South, a group of ten high-profile firms from the south-east of England, which is showing great acumen by coming together to promote best practice, assisting its members in fulfilling their business goals. It was great to talk over some of the issues with a group of partners from dynamic firms who are keen to consider how they can take advantage of the innovations.


Law South members wanted to know what ABSs could mean for them and we talked about increased access to finance to fund capital projects that will support expansion or help to achieve efficiencies; the freedom to take advantage of potential synergies with providers of, for example, insurance services or with estate agents; new ways of rewarding staff, particularly non-lawyers who contribute to the growth and success of the business; and different practice structures that will create more opportunities for those who may currently find it difficult to enter the profession.



The Law Society now needs to work with the government to ensure that the legislation implementing the Clementi reforms brings in a framework for the regulation of legal services that supports the way solicitors want to practise in the 21st century and that reflects the reality of modern circumstances in a highly diverse and specialised profession.


Members of Law South asked me about the prospects for what is often described as differential regulation – that is, an approach that takes account of the risk to the consumer posed by different types of services and indeed the sophistication of those consumers. Imagine, for example, the difference in the level of protection necessary for a sick person amending their will, and a large corporation seeking to buy out a competitor. And between those extremes, of course, there are many variations – from firms working with individuals or small business to those specialising solely in commercial work for larger clients with their own in-house legal teams.


Law South members were also interested in the idea of a polluter-pays approach to funding the investigation of consumer complaints. This is a step that the Law Society has not been able to take, because of the limitations of our statutory powers. Law South was keen for a move towards an approach that would see more of the costs of complaints-handling borne by those who give rise to the complaints in the first place. Its members were therefore pleased that the White Paper paves the way for that to happen.


However, Law South members were rightly concerned by the cost of the new regulatory framework. At the moment, the government pays for the various elements of oversight regulation – the Lord Chancellor, the Master of the Rolls and so on – but is suggesting that in the future, the legal profession should bear all of the costs of the new legal services board that will take over. The Law Society will be lobbying hard to try to prevent new financial burdens being imposed on the profession.


Nonetheless, there was a clear and welcome commitment in the White Paper to ‘maintain the principles of those providing legal services’, with the core values of the profession being defined as independence, integrity, the duty to act in the best interests of the client, and client confidentiality. It is in that spirit that we will all move forward – and the Law Society will be working hard with practitioners and the government to get the best out of the reform process both for the profession and its clients.


Janet Paraskeva is the Law Society chief executive