The Law Society has said new providers entering the market as alternative business structures (ABSs) should be obliged to offer financial support to existing law firms to safeguard access to justice.

In its response to the Solicitors Regulation Authority’s consultation on ABSs, Chancery Lane warned that existing firms would be threatened if new providers were able to ‘cherry-pick’ the more lucrative aspects of work.

The Society noted that new, ‘commercially motivated’ providers were unlikely to provide services in unprofitable fields such as social welfare. It warned that the public’s access to these services could be put at risk if existing law firms were forced out of business.

The paper suggests that wherever an ABS application poses a risk to existing firms that advise on social welfare issues, the licensing authority should ‘impose appropriate conditions’ on the licence. For example, it could oblige the new provider to offer services in welfare law.

The paper also suggests that the granting of the licence could be subject to an undertaking to give financial help to current providers which become ‘imperilled’ by the new entrant, or to fund a legal advice centre to provide the services.

The paper puts forward a further option whereby the new ABS would only be required to provide financial support to existing firms at a point where there was a ‘significant decline’ in the number of firms offering such services, after the ABS had entered the market.

The Society acknowledged that the proposals could involve considerable work for the licensing authorities. It suggested that the cost of research to assess the market impact of the ABS application could be funded by the organisation seeking an ABS licence.

  • The Scottish government has confirmed it will introduce ­legislation enabling ABSs in the next parliamentary session at Holyrood.