Djanogly fires the starting gun on ABSs and has no plans to delay them

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By Legal Futures

22 September 2010


The Cabinet’s reducing regulation committee has given alternative business structures (ABSs) the green light and they should happen on 6 October 2011, justice minister Jonathan Djanogly confirmed today.

In a speech to the Law Society, Mr Djanogly – who welcomed the prospect of multi-disciplinary practices and external investment in law firms – said “no one should be under the illusion that I wish to delay ABS introduction, and all lawyers should be preparing for its introduction”.

He predicted that ABSs will “lead to improvements in service quality by stimulating competition between providers of legal services”. They would also enable greater co-operation across the legal and other professions “so that knowledge and resources can be joined together to meet the challenges of the increasingly globalised economy”.

Lawyers should benefit “by having the ability to gain from the economies of scale and the greater opportunities that larger and more diverse businesses can offer”, he said, while consumers should benefit from the option to have all of their legal and related needs dealt with by a single entity.

Law Society concerns over ABSs should be addressed by robust rules and regulation of ABSs, he said, and Mr Djanogly pledged to ensure that the impact on access to justice, sole practitioners and smaller firms will be considered before the final decision to commence the regime is taken. He pointed out that several steps need to be taken before ABSs go live but indicated that 6 October 2011 remains the likely starting date.

He added: “Risks to small or inefficient legal suppliers may be mitigated by the possibility provided by ABS that practitioners from different professions (legal and non-legal) would be able to join up to ensure that it is economically viable for them to continue to provide legal and associated services, and to gain from efficiency savings. I forsee here that those firms that take a proactive approach will benefit.”

Mr Djanogly said ABSs are part of the government’s agenda on reducing regulation. “I do believe that the changing legal landscape should lead to a reinvigorated and more competitive legal services sector. The introduction of ABS, in particular, will allow for greater flexibility of professional services provision and businesses better equipped to respond to commercial pressures.”

He explained: “There will also be more opportunities for firms of all sizes to work, partner and merge with other professional services firms to create multi-disciplinary practices. These MDPs may be complex global services firms, or a local solicitor partnering with a local accountant. Likewise, the ability to raise equity investment in legal service providers should create a real opportunity for the UK to cement its position as the place the world comes to when raising finance for professional services firms.”



One Response to “Djanogly fires the starting gun on ABSs and has no plans to delay them”

  1. It was a truly amazing conversion to behold, given the scepticism and downright opposition I remember only too well when campaigning for these reforms. But I am glad the coalition government are finally supporting ABS and the new regulatory regime. Now it’s up to the law firms themselves to really embrace change and deliver for consumers.

  2. Louise Restell on September 22nd, 2010 at 11:58 am

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