The government is moving too quickly in introducing alternative business structures (ABSs) to deliver legal services, MPs and peers have warned.



A report from the joint parliamentary committee scrutinising the draft Legal Services Bill also called for amendments to secure the profession's independence.



The committee sought to rein in those parts of the Bill that departed from the recommendations of Sir David Clementi. Chairman Lord Hunt of Wirral told the Gazette: 'Our main theme is to go back to the future as envisaged by Sir David.'



Sir David said legal disciplinary partnerships (LDPs) between different types of lawyer should be the first step towards multi-disciplinary partnerships (MDPs), but the government decided to move straight to MDPs and non-lawyer ownership. The report said the evidence did not justify this.



It also highlighted the potential for 'an undesirable conflict between shareholders and lawyers' if external ownership is introduced, and found ABSs could hit access to justice in rural areas.



'Given the level of uncertainty about the impact of ABS provisions, we urge the government to use less haste and more care,' the committee concluded.



It laid out a four-stage blueprint to introduce ABSs: LDPs would be the first stage, followed by MDPs with professions where there is a low likelihood of conflicts of interest and also ownership by membership organisations.



The third stage would see MDPs with accountants and others, together with ownership by companies large enough to have reputational capital that would discourage acting against clients' interests. The final stage would be free market ownership subject to a 'fitness to own' test for anyone holding more than 5% of capital.



However, the committee was worried by evidence which suggested that certain ABS models could be regarded as illegal in some countries. 'This would necessitate a fundamental rethink,' it said.



On independence, the committee sought to curtail the Secretary of State for Constitutional Affairs' role in appointing members of the proposed oversight regulator, the legal services board (LSB). It also criticised the scope of the minister's ongoing powers, which it said should be restricted to 'important points of public policy'.



Similarly, the LSB's powers need examining to ensure that lead responsibility for regulation rests with frontline bodies. Other recommendations included regulating will-writing, and adding the need to protect the public interest to the objectives of regulation.



The Department for Constitutional Affairs has two months to respond. Minister Bridget Prentice said it was pleased to see support for the overall regulatory framework.



Both the Law Society and Bar Council called on the government to act on the report. Law Society President Fiona Woolf said: 'It shows the draft Bill must change to get the future framework for the regulation of legal services right.'



Neil Rose