Rather than feeling threatened by accountants’ move into legal services, law firms should set up alternative business structures (ABS) and compete with them, the president of the Law Society has said. Jonathan Smithers said: “The success of ABS to date indicates that clients are generally not concerned about sourcing their legal services from non-lawyers.”
SRA: clients may not need “detailed information” where work is referred to firms’ separate businesses
Clients may not need detailed information about separate businesses when work is referred to them by their law firm owners, the Solicitors Regulation Authority has said. The Legal Services Consumer Panel has warned that the new separate business rule could leave consumers in the dark.
There is no reason why solicitors setting up a new law firm should not do so as an alternative business structure, the chief executive of the Solicitors Regulation Authority has said. Mr Philip predicted that solicitors would in the future be ” business people first”.
Peninsula Business Services, one of the largest unregulated providers of legal services in the country, has blamed Solicitors Regulation Authority rules for scuppering its plans to set up an alternative business structure. The company provides employment law, HR and health and safety advice to over 30,000 small businesses in the UK.
The Legal Services Board has approved radical reforms of the separate business rule for solicitors, while noting that the changes “carry some risks to consumers”. Information on the difference between regulated and unregulated services is to be tested with consumers before the change comes into force.
Two firms applying to the Solicitors Regulation Authority to become alternative business structures asked to keep their client money with the Bar Council’s third-party escrow account, BARCO, it has emerged.
The Solicitors Regulation Authority approved a radical overhaul of the separate business rule at its board meeting yesterday, despite strong opposition from the Law Society. The changes are planned to come into force on 1 November this year.
The Legal Services Consumer Panel has given “qualified support” to plans by the Solicitors Regulation Authority to rewrite the separate business rule. The panel said the existing rule had “fallen into disrepute”.
Plans by the Solicitors Regulation Authority to relax the separate business rule could cause “irreparable damage” to the solicitor brand and “drive significant numbers of the profession” into the unregulated sector, the City of London Law Society has warned.
Law firms should be able to provide accountancy and other services without setting up separate businesses to help them compete with alternative business structures, the Solicitors Regulation Authority has proposed.