You may have noticed that lawyers opposed to the prospect of supermarkets, banks and other non-legal firms running legal practices recently protested outside the Royal Courts of Justice (pictured, left). They handed out cans of baked beans labelled ‘Legal services by supermarkets is as ridiculous as lawyers selling beans’.

Apparently, their gesture was inspired by justice minister Bridget Prentice, who said a while ago: ‘I don’t see why consumers should not be able to get legal services as easily as they can buy a tin of beans.’

Nineteen months after the passing of the Legal Services Act 2007, it seems late in the day to be objecting to external investment in law firms. But there are some serious public interest issues which the profession, as well as the public, need to address.

I suspect that most lawyers’ attitudes to alternative business structures (ABSs) are determined by whether they see them as a threat or an opportunity. Some fear it will devalue the status of solicitors and commoditise legal services, and possibly even deliver a mortal blow to their own firm. Others see them as a chance to team up with other professionals to create exciting new types of business, and also to attract investment in their firms, enabling growth.

To those opposed to the liberalisation of legal services, I have to say that it is not the role of a regulator that operates in the public interest to prop up or shield firms that cannot cope with competition. The government asked Sir David Clementi to recommend a framework that promoted competition – which he did – and parliament accepted his key recommendations. Neither does the SRA share the view that traditional business structures are safe, and that the new ones will be risky.

The SRA has just published a consultation on regulating alternative business structures, at www.sra.org.uk/consultations. It complements the Legal Services Board’s discussion paper, Wider Access, Better Value, Strong Protection. Both the LSB and the SRA expect the first ABS licences to be granted in 2011 – which is not far off.

Have your sayIf you want to have your say about how ABSs should be regulated, you need to speak up now.

The general direction of travel has been set by parliament. The debate now is not about whether ABSs are good or bad, but about how regulation can best ensure that consumers, both individual and corporate, can access high-quality legal services from business structures of all types and sizes.

Several kinds of business model are conceivable. We are confident that we could regulate them all effectively. We intend to focus on outcomes and the degree of supervision rather than be prescriptive about types of structure. However, we will listen to arguments that a particular type of structure should not be allowed in the public interest.

We think that the same ethical and service standards and consumer protections should be applied to ABSs as to traditional law firms, but we will need to introduce entry requirements to ensure that only ‘fit and proper’ people can become managers.

Firms able to demonstrate that they have strong consumer safeguards in place might be given greater freedom in the way they meet regulatory requirements.

We also propose a risk-based approach, one based more on firms than individuals, which emphasises the encouragement of compliance, rather than concentrating upon the punishment of non-compliance. We want to know if you think that is the right approach.

Where legal services are provided by solicitors in traditional firms or legal disciplinary practices, all the services provided by their firms are subject to regulation. However, the Legal Services Act requires an ABS to be licensed only if it is providing reserved activities. A public debate about whether firms providing non-reserved legal activities should be regulated would be helpful. We need to avoid regulatory gaps.

We are seeking views on what kinds of organisation should not be able to own an ABS, the insurance and compensation fund requirements on ABSs, how firms should be described so consumers can understand their nature, and how to avoid conflict between different regulators, especially where there is a range of professions working under the same roof.

One concern about ABSs is that big commercial providers may drive other kinds of firm out of business and that this could harm access to justice. The SRA (and previously the Law Society) has not tried to prevent new firms from entering the market, even though the increased competition might lead to reduced consumer choice. However, ABSs could result in more dramatic changes. We are keen to hear views on how the needs of particular groups, especially the vulnerable, should be safeguarded.

If bigger firms did tend to elbow smaller ones out of the market, diversity within the profession could be adversely affected, because black and minority ethnic solicitors tend to be concentrated in smaller practices. The SRA proposes that the existing equality and diversity requirements should be applied to ABSs and that this should be carefully monitored.

Some of these issues may seem dauntingly complex – but they are undeniably important. You may find it helpful to discuss them with colleagues or at your local law society, and to present your views to the SRA collectively.

But whatever you do, please don’t ignore ABSs. Like your local supermarket, they are just around the corner.

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