Opening the market for legal services
14 May 2009
The Legal Services Board (LSB) today sets out a route map to a more competitive and consumer-driven market for legal services.
For centuries, legislation and regulation has tightly restricted the management, ownership and financing of firms providing legal services, limiting how they can serve consumers. The LSB is driving forward regulatory reforms to open up the market to “alternative business structures” (ABS) in 2011.
Examples of ABS might range from a high-street firm offering both legal and accountancy services to a law firm floated on the stock exchange. Consumers should get more choice, better value and more responsive services from a market-place open to such diverse and innovative models.
The LSB is committed to getting the regulatory framework in place to allow new types of providers to seek a licence to offer legal services by mid-2011. It is setting up an Implementation Group, chaired by the LSB Chief Executive Chris Kenny, to build momentum and make sure the project remains on track.
The new LSB discussion paper Wider Access, Better Value, Strong Protection seeks views about achieving the benefits and mitigating risks of opening the market and the appropriate regulatory framework for ABS. Launching the discussion paper at a Legal Week conference today, LSB Chairman David Edmonds said:
“Opening the market to ABS will help to transform the way in which legal services are delivered. It offers benefits to consumers of legal services, be they private individuals, small businesses or large companies.
“More competition will be good for the legal services sector as it is has been in other sectors. I hope that lawyers, law firms, and their representative bodies will embrace change because ABS offers great opportunities to them too. But all firms will need to respond to the changing market, whether they adopt ABS or not.
“The case for ABS has been well made by others over a number of years so I am glad we are now in a position to make it happen. It is a top priority for the LSB and we are driving the agenda forward. We are today making clear our commitment to the first ABS licences being granted in 2011.
“We want to see the removal of regulations that act as unnecessary burdens on legal practices or as anti-competitive barriers to entry. Regulation should instead focus on addressing identified risks to consumers such as conflicts of interest.
“We will be working closely with each of the regulatory bodies including the Solicitors Regulation Authority to get the right licensing regime in place.”
The consultation exercise on the discussion paper will run until 14 August. Responses will be used to help shape the regulatory framework for ABS.
Notes to Editors
- The discussion paper can be accessed online at: www.legalservicesboard.org.uk.
- The Legal Services Act 2007 (“The Act”) provides for the creation of the Legal Services Board as the oversight regulator for legal services in England and Wales.
- Part 5 of the Act sets out the legislative framework for ABS. In summary, regulators of the legal profession will be able to seek designation from the LSB and the Lord Chancellor as licensing authorities. Firms with alternative business structures will then be able to apply to licensing authorities for licences to offer legal services.
- For more information or interview requests please contact Craig Robb at the LSB on 020 7271 0072 or 07870 214 742.