Solicitors will be able to accept investment and services from non-lawyers in return for a share of their fees, the Law Society Council decided last week.

However, the council once again rejected proposals to liberalise the ban on paying referral fees.

The sole purpose of the fee-sharing rule will be to facilitate the introduction of capital and/or services to a practice, but the agreement must not influence or constrain the solicitor.

Examples of its operation include a bank providing a loan to a firm or a supplier of IT systems providing its services, both in return for a cut of gross fees.

Although there will be no cap on the level of fees that can be shared, draft guidance said solicitors should assess whether the arrangement puts at risk their duties to act independently and in the clients' best interests.

The Law Society will be able to ask for details of the arrangement and the assessment.

Andrew Holroyd, chairman of the Society's standards board, told the meeting: 'We need to give firms a helping hand...

solicitors are finding it difficult to compete in the market-place and this rule will enable them to do so.' The precise rule will be considered in December.

Meanwhile, two changes to the rules - one allowing payment of referral fees where an introducer offers marketing and referral services, and a second allowing it in all cases where the introducer does not seek to 'compromise or impair the solicitor's practice' - were both rejected.

Richard Wiseman, general counsel at Shell UK and council member for commerce and industry, said the rules would be hard to enforce because 'it will be impossible to tell that there's no influence from the introducer on the firm'.

Michael Garson said that if the changes were adopted, the 15,000 residential conveyancers he represents on the council would have to spend 200 to 400 in referral fees for every transaction.

The Office of Fair Trading (OFT) wrote to the Society in April, stating that the referral fees and fee-sharing bans probably breach competition law; it has since received complaints about the referral fee ban from a major estate agency chain and a law firm facing the Solicitors Disciplinary Tribunal over claims that it paid referral fees to a claims management company.

A Society spokesman said the fee-sharing change 'will significantly help solicitors secure the necessary capital to develop their businesses.'

On referral fees, he said: 'We will explain the thinking behind the council's decision to the OFT.

The standards board will consider in due course whether to bring alternative proposals to the council.

The outcome of our discussions with the OFT will no doubt be one of the factors to be taken into account.'

The draft fee-sharing guidance specifically excludes allowing referral fees by the back door.

By Jeremy Fleming