External ownership: Sir David maintains that commercial concerns already exist


Sir David Clementi last week hit back at critics of his report into the legal market, saying that fears over external ownership of law firms have been 'exaggerated'.


Addressing the Law Society's law management section annual conference in London - run in conjunction with the International Bar Association - Sir David said he had seen no evidence that existing rules allowing outside ownership of firms of licensed conveyancers have had a negative impact.


In-house lawyers have shown they can stand up to commercial interests, he added.


Making his first public statement since issuing his report in December, Sir David said: 'The idea that outside ownership would introduce a commercial element that is not already there is fanciful.'


He predicted that conflict of interest issues would deter lots of companies that currently work closely with solicitors, such as insurance companies, from owning law firms.


Sir David maintained that there is 'momentum for change' despite some opposition to his report - much of which, he argued, was protectionist but dressed up as being in the public interest. It would be 'a great lost opportunity' if his recommendations were not taken forward - and quickly, he insisted.


He told the conference that he had been heartened by the Law Society's response to his conclusions. Its plans to separate regulation from representation are 'largely consistent with my report'.


Sir David also defended his decision not to recommend that unregulated providers of legal services should come within the regulatory ambit.


His report said each case required a detailed cost/benefit analysis, and set out the principles ministers should consider when deciding whether a particular group should be regulated.


He told delegates that it would have taken him 'ages' to analyse each group himself, and by the time he had done so, a new one would have emerged.