Legal Services Act

The Legal Services Board today launched its first statutory investigation into whether to extend the scope of regulation, after its consumer panel recommended making will-writing a reserved activity. It goes further, however, by looking at what measures are required to protect consumers in the probate and estate administration markets as well,

Mid-market law firms are responding cautiously to the changing legal services market, with just 14% saying they are actively considering external investment and 21% anticipating a merger or major restructuring in the next year, according to new research.

Solicitors who offer financial services and plan to become alternative business structures could be forced out of the market by plans to plug a gap in consumer protection created by the Legal Services Act, the Financial Services Authority has admitted.

The Solicitors Regulation Authority has already received “strong interest” in ABS investment from abroad and from non-English law firms that want to use the structure, it has revealed. They includes one of China’s largest law firms.

The board of the Solicitors Regulation Authority this month moved to parity between solicitor and lay ordinary members, ahead of introducing a lay majority in two years’ time. Shamit Saggar, the former chairman of the Legal Complaints Service, joined the board this month as part of a deal with the Legal Services Board.

The rule which prevents solicitors and in the future alternative business structures (ABSs) from hiving off unreserved legal work into unregulated businesses may stifle new entrants to the market, the Legal Services Board has warned. The board is now considering a review of the rule’s “continuing relevance”.

The Solicitors Regulation Authority and Bar Standards Board have begun work on creating an online “virtual community” for consumers known as “Legally Speaking”. The news comes as we can reveal the Legal Services Consumer Panel has escaped the “bonfire of the quangos” – just as the panel’s chairwoman is stepping down.

Competition from alternative business structures has emerged as a significant worry to top law firms, a new survey has shown. While the finance directors at the top 100 firms were most concerned about the impact on profitability of downward pressure on fees from clients, 46% said the consequences of deregulation are a high or medium risk to profits.

Law firms will need a turnover of at least £75m to list on the stock exchange, a leading investment banker said this week. This is because “the public markets prefer larger businesses at the moment” and smaller ones may struggle with liquidity.

Alternative business structures should not be introduced until stronger provisions are put in place to stop those convicted of dishonesty from taking a stake in them, a leading Conservative peer has said. Lord Hunt of Wirral called on the government to introduce exceptions to the Rehabilitation of Offenders Act 1974.