Society set to hold consultation on end to fee-sharing ban

The ban on fee sharing is 'unnecessary, unclear, unenforceable, disproportionate and non-targeted', and should be removed, the Law Society's council will be told this week.Presenting a draft consultation paper to the council, the regulation review working party will say its preliminary conclusion 'is that the rule which bans fee sharing can be removed, since the evils which the rules were intended to prevent can be adequately addressed by other parts of the framework of rules'.

Although the working party emphasises that the paper does not centre on multi-disciplinary partnerships (MDPs), removing the ban would clearly add to the pressure for MDPs.While conceding that it is 'crystal ball gazing' to predict what effect removing the ban would have, the working party will say the benefits would far outweigh the risks - usually held to be the threat to independence.It would allow firms to explore 'innovative methods of service provision', to operate a referral system enjoyed by other professions, and also entice investors into putting money into firms by allowing profit sharing.In the absence of the rule, in-house legal departments could be converted into independent practices, the council will be told: 'For example, a local authority might wish to establish its in-house legal department as a separate independent solicitors' practice, so that it could be free to take on other clients, but its expertise would still be available to the authority, which would be one of its major clients'.Working party chairman Edward Nally admitted that the consultation will raise issues concerning conflict and the unleashing of new market forces.

And he said it was also a 'toe in the water in relation to the whole concept of multi-disciplinary partnerships.

'I am expecting a mixed reaction to the paper,' Mr Nally said.

l A survey of 110 jurisdictions by international legal Web site Hieros Gamos has found that 53 countries allow MDPs, while 36 Bar associations are studying them.