Government to expand ABS plans

9 December, 2015

The alternative business structure (ABS) market could be set to take-off, as the government announces new plans to make it easier for other businesses to offer legal services in England and Wales.

The move comes after a recent study found that ABSs were 15 per cent more likely to introduce new legal services than other regulated providers and that their introduction was creating a more competitive legal market for consumers.

The government announced that it wants to help new entrants gain a foothold in the market and will be launching a consultation paper in spring 2016 on removing barriers to entry for ABSs and making regulators independent from their representative bodies.

This move, if approved by Parliament, will help businesses such as supermarkets and estate agents to offer legal services like conveyancing, probate, and litigation in England and Wales.

The chairman of the Legal Services Board (LSB), Sir Michael Pitt, welcomed the government’s proposal. He said: “I am delighted that the proposals submitted to ministers in conjunction with the eight legal services regulators in July have helped inform this important development.”

“As our work with the other regulators earlier this year showed, there is a strong case for fundamental reform of the regulatory framework in this sector.”

“Lack of independence between regulators and representative bodies is slowing reforms that would otherwise benefit both the profession and consumers.”

However, Catherine Dixon, chief executive of the Law Society, said that while the solicitors’ representative body support the government’s aim of ensuring a fair and balanced regulatory regime, public protection demands that the setting of rules for legal services must be independent of government.

“Freedom from government intervention is an essential cornerstone of our justice system and of the rule of law,” said Dixon. “England and Wales is recognised as the jurisdiction of choice but that standing is threatened by any suggestion that government is able to fetter the independence of the legal profession.”

“Any such perception, real or actual, would impact on our standing internationally and threaten the direct economic contribution of £23bn made by solicitors.”

“The legal profession must be free to set the standards and rules under which it operates, and also own legal education and training so that standards are led by the people who practice law.”

The possible addition of hundreds of new legal service providers, whilst good for consumers, may have a significant effect on the day to day services that many regional law firms rely on. If you are concerned about the potential impact ABSs could have on your practice’s fee income then now is the time to contact our team at Watson Buckle. To find out more about how we can help you, please contact us.