Legal Services Act

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.

Law firms are reporting diminishing interest in external investment and alternative business structures, a new survey has found. The Legal Services Act Index, produced by Baker Tilly, found that 50% of respondents were considering an outside investor, compared to 60% last autumn.

The overlap between regulated and unregulated legal services is causing consumer confusion, with online services emerging as a particular problem, the Legal Ombudsman (LeO) has warned. LeO said it needs more clarity about the limits of its jurisdiction as the market is already changing and innovating.

Fifteen south Wales law firms are set to merge back-office operations and link up with a leading chambers with a view to bidding for a criminal legal aid contract as a single business. It is a move that could foreshadow the future organisation of criminal defence work.

A single regulator for all legal services is “logical and plausible”, but not inevitable, a report for the Legal Services Board has concluded. Former Ministry of Justice official Nick Smedley argued that the existence of multiple regulators “focused on the differences of individual practitioners” is unlikely to be relevant in a post-alternative business structures market.

The four years since the Legal Services Act have seen “positive changes” for consumers, but many problems persist, the first ever assessment of the reforms has concluded. The consumer impact report, published today by the Legal Services Consumer Panel, says consumers usually get the outcomes they want and most are happy with the service they receive – although it points out that they have little experience against which to judge this.

The Institute of Chartered Accountants in England and Wales (ICAEW) is investigating how it can license accountancy firms to become alternative business structures and provide legal advice to clients, Legal Futures can reveal. The ICAEW is set first to apply for the right to regulate its members to provide reserved probate activities.

There are a number of risks and dangers associated with using an aptitude test to select law students – particularly that it will favour those from privileged and certain class and ethnic backgrounds – a report commissioned by the Legal Services Board has concluded.

The great majority of consumers who have used legal services are satisfied with the outcome, although many do not feel they received good value for money, a survey has found. Worryingly for lawyers likely to face competition from trusted brands after October, however, it suggested significant public distrust of lawyers.

Complaints against barristers by litigants-in-person forced by legal aid cuts to represent themselves are rising fast, according to the Bar Standards Board. Many result from a misunderstanding of the role of opposition barristers. The Justice Bill, containing more cuts, should be published today.

Poor communication between lawyers and their clients was “writ large” as a theme running throughout cases brought to the Legal Ombudsman (LeO) in its first six months, the chief ombudsman has reported. It launched nearly 4,000 investigations by the end of March, from more than 38,000 calls.