The Chartered Institute of Legal Executives (CILEx) is set to become the sixth body allowed to license alternative business structures (ABSs) after its application was approved by the Lord Chancellor.
It will enable members to set up their own businesses with non-lawyer ownership and investment, regulated by CILEx Regulation, the institute’s independent regulatory arm.
The application, made by CILEx Regulation, was first approved by the Legal Services Board last month and yesterday Lord Chancellor David Gauke backed its decision.
An order will be laid in Parliament in due course to designate CILEx as an ABS licensing authority under the Legal Services Act 2007.
The Solicitors Regulation Authority, Bar Standards Board, Council for Licensed Conveyancers, Intellectual Property Regulation Board and Institute of Chartered Accountants in England and Wales all currently regulate ABSs.
CILEx Regulation chair Sam Younger said: “This is excellent news. It will allow us to license ABS firms, building on the practice rights and entity regulation that we already offer.
“It will both increase opportunities for CILEx practitioners and deliver a wider choice of regulator for all providers of legal services.
“It recognises too that CILEx Regulation delivers an outcomes-focused, risk-based, proportionate and flexible regulatory regime fit for the future of legal services.”
CILEx Regulation already regulates chartered legal executives and other regulated lawyers who want to set up firms, so long as they do not have non-lawyer managers or owners.
CILEx president Millicent Grant added: “Our members are skilled professionals who often have experience beyond the law. They know what it takes to run a successful business. It is right that their firms can bring external investment, advice and knowledge into their ownership.
“This move will also help to encourage competition within the legal services market.”
According to CILEx Regulation research in preparing its application, those looking at the ABS option were particularly interested in bringing non-lawyer specialists – such as a finance or marketing expert – into the ownership of the business, and unregulated businesses doing unreserved work into regulation, so that they could conduct reserved legal work.
The institute argued that the greater diversity of the CILEx membership – 75% are women and more than a third of new student members are from a black, Asiam or minority ethnic background – meant its ABSs were more likely to have a diverse composition.
Ms Grant said: “We believe that greater diversity of opportunity within the legal market can assist in developing consumer choice and finding better ways to deliver better services.”