A sixth potential alternative business structure regulator has emerged after an application was put forward from the legal executive sector.
CILEx Regulation, the regulatory body of the Chartered Institute of Legal Executives, wants to enable members to set up their own businesses with non-lawyer ownership and external investment.
The ABS concept has been around since the Legal Services Act 2007 signalled the liberalisation of the legal services market. Regulators of solicitors, barristers, chartered accountants, licensed conveyancers and patent attorneys can already authorise ABSs.
If the CILEx application is successful, it will increase the choice of regulators for law firms wanting to become an alternative business structure. It may also offer an option for legal executives currently working in law firms to operate their own business in the legal profession.
The Legal Services Board will consider the CILEx application and has 12 months to decide whether to grant authorised status.
CILEx says the greater diversity of its membership ensures that ABSs are more likely to come from a wider range of backgrounds.
In a joint statement, CILEx president Millie Grant and CILEx Regulation chair Sam Younger said: ’We see this application as integral to the opportunities developed for CILEx members in recent years. We believe that by widening the choice of legal providers for consumers, as well as the choice of regulator for legal professionals seeking to run their own firm, we are helping to encourage competition within the legal services market.‘
CILEx carried out research in late 2015 which showed a third of members were positive about operating independently, rather than being employed by solicitors, and of those around half were positive about operating as an ABS. Many were keen to conduct reserved legal work and bring in non-lawyer specialist such as a finance or marketing expert.
The ABS application states: ‘CILEx members would also have the benefit of operating within an outcomes focused, risk based, proportionate and flexible regulatory regime. Our conduct rules demand high standards of those we regulate but without being overly prescriptive or disproportionate.’