The SRA’s policy director has insisted that alternative business structures are still the best way to reach out to consumers wanting a holistic approach to professional advice.
Crispin Passmore said research shows ABSs to be more innovative than both regular law firms and entities from other professions in providing the solutions clients need.
Speaking at an event to mark the 25th anniversary of the financial advisory body SIFA, Passmore said the people and businesses that use legal services want more tailored services and would prefer a ‘one-stop solution’ for all their needs.
He added: ‘Whether it be legal, financial, accountancy, or business support. People and businesses don’t mind who provides the solution, as long as it’s the right solution and is affordable.’
He pointed to research showing that fewer than one in 10 people or small businesses instruct a solicitor or barrister to deal with their legal needs, and suggested businesses are more likely to call their accountant than their lawyer for legal advice.
Passmore said ABSs have allowed external capital and expertise into legal services and have proved to be more innovative than all other types of competition with traditional firms.
‘One thing we are learning about the modern market is that people find it difficult to characterise whether their problem is legal, financial, business or whether it is even solvable,’ he added. ‘People don’t fit into neat compartments. So we are seeing firms taking an increasingly holistic approach to problem-solving. And many law firms benefit from the expertise and specialism of financial advisers, accountants and others.’
The SRA, he said, will try to facilitate this process and is also still keen to allow solicitors to practise from non-regulated firms, which he predicted could be introduced ‘within the next couple of years’.
This month sees the fifth anniversary of the first ABS receiving a licence from the Solicitors Regulation Authority. Hundreds of businesses have since made successful applications, but there are signs that the rate of entities wanting to become an ABS has slowed. This year to date has seen just five new additions to the SRA’s register of alternative business structures – less than half the number added in the same period last year.
The SRA has taken steps to improve the application process since the earliest registrations, but some doubt the other professions really want to fully commit to the provision of legal services.
In an interview with the Gazette this week, Andrew Hosking, head of professional services at insolvency specialist Quantuma, said the prospect of a large accountancy or advisory practice joining with a law firm would be ‘economic suicide’ as the ability to attract referral work from other firms, clients and institutions would be compromised.
On large accountancy firms taking market share, Hosking was also sceptical, adding: ‘I wonder how many top 25 legal practices in the UK would refer work to such a firm’s accountants knowing they will have their own law practice work on it.’