Legal Services Board prepares to fire gun on alternative business structures
The Legal Services Board has set the date on which alternative business structures (ABSs) can start to operate, paving the way for external ownership of legal businesses.
Backers of ABSs will be able to apply for a licence from mid-2011 with a view to operating from 6 October that year.
Legal Services Board chairman David Edmonds described the announcement as a significant milestone. He said: “It gives certainty to the approved regulators, the firms they regulate and to potential new entrants alike. Moreover, it paves the way for real benefits to be delivered for consumers on the fastest possible timetable.”
Arguing that the timetable was “challenging, but realistic”, the LSB chairman said: “It gives time for regulators to prepare their licensing framework for ABS – frameworks that we will ensure focus on outcomes for consumers, rather than over-complicated rules that stifle innovation and better value.
“We have been clear that we want traditional firms to have similar flexibility as well. So we welcome the commitment of the Solicitors Regulation Authority to move ahead with outcome-focused regulation on a similar timetable.”
The LSB plans to publish guidance explaining how applications for becoming licensing authorities for ABS from approved regulators will be evaluated.
SRA chair Charles Plant said the authority welcomed the progress towards modernising the legal services market. He added: “We are working closely with the LSB, the Law Society and others in legal services to deliver a new form of regulation concentrating on high-quality outcomes for consumers.”
The LSB’s announcement comes shortly after the board’s chief executive, Chris Kenny, called on local government lawyers to seize the opportunities presented by the prospective introduction of ABSs.
Speaking earlier this month at a Bevan Brittan seminar on legal services regulation, Kenny said local authority legal teams needed to consider the impact of the changes being brought in under the Legal Services Act on their roles as commissioners, providers and employers.