Last week the Legal Services Board (LSB) published its consultation paper Alternative Business Structures: Approaches to Licensing.
The document is about how the LSB works with lawyers to find effective ways of providing legal services to those who need them. I have already talked to many lawyers and others about proposals on liberalising management and ownership controls of law firms.
We are in a changing environment. While the Legal Services Act 2007 provides the framework for regulatory change, the real impetus is coming from within the existing market. It is clear that although reservations undoubtedly remain, a critical mass of practitioners is emerging who are looking to seize the opportunities the act permits.
Regulation has its part to play. Many lawyers are already delivering or planning to deliver their services in different ways. They are committed to serving the public. Many are frustrated, however, by the efforts they have to make to ‘work around’ current restrictions on practice to allow innovative service provision.
The LSB and the approved regulators now have the tools to modernise how lawyers are regulated and remove unjustified constraints on their practice, while ensuring that the highest standards of professional ethics remain. The Solicitors Regulation Authority and the Bar Standards Board have already started to take the essential steps that will allow the market to flourish further. This is about regulation that identifies and manages risk.
Above all, the consultation launched on 18 November describes the LSB’s vision for a responsive regulatory framework that opens the market to alternative business practices for lawyers and non-lawyers alike. It needs a response from practitioners. To make the new world work the LSB and the approved regulators must devise a framework that provides the protections that consumers need and offers opportunities for lawyers and other interested groups and investors to widen the range of service on offer.
Some of the barriers in existing regulation that prevent delivery of these outcomes can be safely removed because the overall framework will ensure that consumers’ interests are considered, best professional principles are safeguarded and the public interest protected.
There are three key protections at the heart of the proposals:
A test to ensure that non-lawyer owners and managers of legal practices are fit and proper.
The introduction of two new roles in every new firm: head of legal practice and head of finance and administration.
A widening of the complaints-handling system so that those who use companies that provide legal services alongside other services have access to the Office for Legal Complaints.
The consultation document contains more detail about this. It gives lawyers the chance to tell the LSB what kind of rule framework they need in this changing environment.
The LSB wants its proposals to be informed by the widest variety of views, especially those of practitioners with experience in direct service delivery and those who have used or might need to use such services in the future.
Over the next few months, the LSB will be looking at the responses to this consultation. It is already working closely with the frontline regulators. Shaping the framework in line with people’s experience will be a major priority, with the timetable assuming that the first legal services practices will be licensed by the new regime by mid-2011. We are on the brink of historic changes.
awyers have a unique opportunity to influence their own future.