Solicitors and barristers could soon be allowed to form partnerships between themselves and other legal professionals, it emerged at the IBA conference.

Speaking to delegates in Auckland via a satellite link from London, Sir David Clementi gave the strongest indication yet that he would recommend in his report to ministers that legal disciplinary practices (LDPs) should be allowed.


Sir David - who is expected to file his report to ministers by the end of the year - told IBA delegates: 'There is a large number of people who represent the consumer interest who are strongly in favour of LDPs and quite liberal LDPs at that. That weighs very strongly on me.'


He said he had been 'anxious' clearly to distinguish between LDPs and multi-disciplinary partnerships (MDPs). 'In my view, an LDP is a legal firm with a primary purpose of providing legal services. MDPs are firms where lawyers and other professionals work together,' he explained. In both, said Sir David, there could be a split between ownership and management.


Any future practice model would have to be carefully regulated, he said. 'We would have to be satisfied that any future practice model had safeguards to protect consumers. We couldn't just let the market decide.'


Sir David told the conference it was right to focus for the time being on LDPs as opposed to MDPs. 'If we haven't yet worked out how lawyers should work together, then we won't be able to work out how lawyers should work with accountants. I regard LDPs as walking and MDPs as running.'


Law Society President Edward Nally reiterated Chancery Lane's support in principle. 'We are very interested in proposals for the solicitors' profession being allowed to attract external capital and in being allowed to practise with other professionals,' he said.


There was also significant support for Sir David's view from a leading City law firm. Allen & Overy senior partner Guy Beringer accused critics of the proposed changes of scaremongering by suggesting that LDPs and possible external investment in law firms could lead to criminals and terrorists running legal practices.


'Clementi seems to have in mind nothing more than allowing, for example, the non-lawyer finance directors of law firms to become partners,' said Mr Beringer. 'It is dangerous to invoke far-fetched, nightmare scenarios. That could give the appearance to the public of a legal profession that is desperately frightened and trying not to change.'


There was backing for that view from the bar. Lord Brennan QC warned: 'If we object too strongly, then the public will start to wonder what we've got to hide. Why shouldn't law firms have outside investment, they will ask. And it is potentially a reasonable question.'


However, he expressed concern at the prospect of large supermarkets and financial institutions offering legal services direct to the public. There were significant issues in relation to access to justice for the socially disadvantaged, he said. '[So-called] Tesco law will push down costs and there will be an inclination on the part of the owners to make the law firm as profitable as possible,' said Lord Brennan. 'That would mean doing only high-volume work with little or no time spent on clients with difficult cases. That could be catastrophic for the high street solicitors.'


The Council for the Bars and Law Societies of the European Union also sounded a warning note. Secretary-General Jonathan Goldsmith said Sir David should address the issue of what arrangements would be in place within LDPs for dealing with the eventuality of non-lawyers stealing from client accounts.