The head of Anglo-Scottish law firm McGrigors has come up with a compromise proposal that could prevent the full implementation of ‘Tesco law’ in Scotland and heal a damaging rift over the future of the nation’s solicitors’ profession.
Managing partner Richard Masters wants the majority ownership of a legal business to remain with solicitors following the introduction of alternative business structures next year. The only exception would be where solicitors are in business with other regulated professionals, such as surveyors or accountants. The change would prevent banks or supermarkets taking a majority stake in a law firm, as they will be able to do in England and Wales from next October.
Master’s motion will be heard at a special general meeting of the Law Society of Scotland, requisitioned by 1,500-strong lobby group the Scottish Law Agents Society, which has spearheaded opposition to Holyrood legislation sanctioning the creation of ABSs north of the border.
The meeting will be reconvened next Friday following its adjournment last month, when the Society agreed to review its policy of support for ABSs following heated exchanges between different factions of the profession.
The schism that has opened up in Scotland in relation to ‘Tesco law’ was laid bare yesterday when the 10,500-strong Society announced the result of a historic secret ballot on ABSs. Some 2,245 members voted in favour of the Society’s policy of supporting ABSs and 2,221 against - on a record turnout for a members’ referendum of 43%.
President Ian Smart said: ‘The narrowness of the result clearly illustrates the just how the issue has brought out widely divergent views across the profession. [It] will inform the ongoing policy debate which will also continue both in private and at the reconvened special meeting.’
If Masters’ amendment is approved, it could form the basis of a proposed amendment by the Society to the legal services bill currently going through the Scottish Parliament. The SNP administration may be receptive to such a development, judging by a statement last night from justice minister Fergus Ewing.
Ewing said: ‘We note the result of the Law Society of Scotland’s referendum on alternative business structures, and welcome the legal profession’s support for the proposals in the Legal Services (Scotland) Bill, albeit by a narrow margin. The profession previously voted in favour of alternative business structures at the Law Society’s AGM in 2008.
‘The move to alternative business structures in England threatens the long-term sustainability of the Scottish legal profession unless Scottish firms are able to operate on a level playing field, so we must act to ensure that the Scottish legal profession remains competitive.
‘We have spent considerable time developing safeguards to ensure that only fit and proper persons are allowed to own firms providing legal services. However, we understand the reservations that have been expressed in respect of outside ownership. We remain keen to have constructive discussions with those who have concerns over the bill.’
In a letter outlining his compromise proposal, Masters nevertheless states that the adoption of his suggestion would mean that the ‘level playing field’ McGrigors and other big Scottish firms want to see would not in fact be achieved. But he describes this as a ‘price to the business worth paying’ if it allows Scotland’s solicitors’ profession to remain united.
In the same poll, a decisive 81% of members voted in favour of a second motion approving the Society’s wish to apply to be a regulator of ABSs when they are introduced.