Scottish solicitors opposed to the introduction of alternative business structures yesterday hailed the ‘halting of the Tesco law juggernaut’ north of the border, following a heated debate over the future of the nation’s legal profession.

At a special meeting held in Edinburgh’s Murrayfield stadium, the 10,500-strong Law Society of Scotland bowed to fierce opposition from grassroots members and agreed to review its policy of support for the Legal Services (Scotland) Bill, the progress of which may now be delayed at Holyrood.

Law Society president Ian Smart, who admitted to the meeting that the Society had been given ‘a kick in the appropriate part of the anatomy’ by 'Tesco law’s' opponents, adjourned the meeting to hammer out a compromise. Smart insisted that reform was necessary, however, in particular so that Scottish firms can compete with their English counterparts when ABSs are allowed south of the border from October 2011.

The adjournment sparked a furious response from one of the leading opponents of reform, Govan Law Centre’s Mike Dailly, who accused Smart of ‘shaming democracy’ by ‘using a technicality’ to avoid putting the matter to a vote.

Yesterday’s meeting was requisitioned by 1,500-strong lobby group the Scottish Law Agents Society, which has spearheaded opposition to the reforms in recent months. It has provided a forum for smaller firms disillusioned by the Society’s decision to back the reforms at a meeting in 2008, when the majority in favour was boosted by proxy votes from the country’s so-called ‘big four’ firms – Dundas & Wilson, McGrigors, Maclay Murray & Spens and Shepherd & Wedderburn.

It is estimated that more than 2,000 solicitors voted to oppose external ownership of practices in advance of yesterday’s meeting, while about 900 were in favour. This triggered a break in proceedings for discussions between Law Society officials, Michael Scanlan, president of the Scottish Law Agents Society (SLAS), and others.

A likely compromise floated on Friday is a proposal to ensure the majority ownership of any legal practice should remain in the hands of solicitors. A revised motion is expected to be submitted at a reconvened meeting; however, the saga is further complicated by the fact that a one member, one vote referendum on ABSs overseen by the Electoral Reform Society is already under way.

In a statement after the meeting, Smart said: 'The Legal Services (Scotland) Bill proposes major changes. There is no disguising that there are differing opinions within the profession on this. However, all sides must be happy that there is now a fuller engagement with these issues and it would be churlish not to acknowledge the contributions of the Scottish Law Agents in that process.

'It was clear that as the debate proceeded today the two sides may not be as far apart as perceived prior to the meeting. The decision to adjourn was taken in the hope that we might yet reach agreement on a way forward that is acceptable to the vast majority of our membership.

‘It is clear that in any approach to the government, we are likely to secure a fairer hearing if we can show that we are speaking for a united profession.

‘The Society’s referendum is currently underway and it would be inappropriate to stop that process. However, in any way forward it will remain the case that the Society’s council will be informed not only by the referendum result, but by the sentiments and contributions expressed today.'

Scanlan said: ‘While SLAS would have preferred for the vote to have been taken today, the adjournment motion proposed by the Law Society of Scotland was democratic and carried by a majority decision of those present. The proxy votes will still count at the adjourned SGM.

‘Some 3,282 proxies (not all in our favour) were cast and this is a record. We can be proud that we have stimulated so much debate within the profession. We believe that the debate is in the best interests of the profession. I look forward to continuing the debate at the adjourned SGM.’

Dailly said yesterday’s meeting heralded the ‘halting of the Tesco law juggernaut’, but went on to accuse the Law Society of subverting the democratic will of its members. He wrote on his blog: 'Despite Mr Smart having previously challenged opponents of Tesco Law to ‘bring it on’, he faced a humiliating defeat today which he, council members, and a small number of multimillionaire big firm partners refused to face for fear of certain defeat.

‘Approximately 2,300 solicitors had granted proxy votes against Tesco law, with only around 921 in favour of the Law Society’s position. As the prospect of defeat presented itself to the Law Society’s minority elite they tried desperately to nobble the democratic will of the majority opposition.

‘They called for a comfort break and asked opponents if they would agree to a restriction on external ownership whereby ABS providers would be required to have a majority of solicitors. The opposition agreed to enter into dialogue after the SGM but refused to compromise their motion, and pressed for a vote.

‘Facing certain defeat, Scotland’s Law Society president called for the meeting to be adjourned and seized upon a technical rule whereby only those present in the room could vote, resulting in over 3,000 proxy member votes being discounted. The net result was that 70 members of the profession – including around 50 council members and a handful of multimillionaires – voted to disenfranchise the democratic will of over 3,200 members.’

Dailly, who had called for Smart’s resignation at the meeting, added later: 'This is a dark day for Scotland’s legal profession. Democracy has been shamed, denied and abused by a small elite of 70 members, against the clear will and voice of 2,300 members who had voted against Tesco Law. The council of our Society has lost all credibility today. You can deny a democratic vote by filibuster or technicality, but the only loser is the reputation of our profession which now lies in tatters after this affront to democracy.’