Legal Services Act

Clients of law firms that provide retail financial services advice and convert to become alternative business structures could find themselves without access to a compensation fund or the firm’s professional indemnity insurance because of a hole in the Legal Services Act, it has emerged.

The Ministry of Justice is to review the international reaction to alternative business structures early next year, it announced yesterday. It will monitor “the international acceptance” of ABSs, with an initial review in February 2012.

The magic circle firms could be worth £6.7bn if they went public – equivalent to £3.9m for each partner – the first stockbroker assessment of the viability of law firm listing has estimated. An analyst note from Peel Hunt LLP said there is “a real economic case” to be made for public market listing.

The Australian legal business consolidator Integrated Legal Holdings, one of the country’s (and world’s) two stock exchange-listed law firms, has announced a 96% increase in profits, and 18% rise in turnover, for the first half of its financial year.

The role of price comparison and customer review websites are set to come under scrutiny from the Legal Services Board as part of efforts to help consumers judge the technical quality of the legal advice they receive. It will also consider whether a “badge” would distinguish regulated and non-regulated providers.

The Legal Services Board yesterday approved the Council for Licensed Conveyancers’ application to become the first licensing authority for alternative business structures, despite the opposition of the Lord Chief Justice.

The Legal Services Board is considering whether to consolidate the disciplinary regimes run by all the different legal regulators, it has emerged. Recent events “suggest we should explore the feasibility of rationalising existing mechanisms sooner rather than later”.

The Solicitors Regulation Authority’s application to become a licensing body for alternative business structures has been endorsed by the Legal Services Board’s consumer watchdog, but with reservations. The Legal Services Consumer Panel expressed disappointment that some recommendations it made during consultations were not adopted.

This week’s news in brief includes details of London law firm EDC Lord & Co, barristers’ chambers 6 Pump Court and referral agency Contact Law launching an online fixed-fee legal advice scheme, ClickLaw24.com.

Merger has been on the minds of three-quarters of large law firms during the past year, but inadequate preparation for the negotiations means few are seeing it through, new research into the 200 practices has claimed.