ABSs won’t launch in October as parliament not ready

The implementation of the Legal Services Act will be delayed because the primary legislation needed to enact it has not been debated in parliament.

The act was due to come into force on 6 October, but the Solicitors Regulation Authority (SRA), which is due to become the regulator of alternative business structures (ABSs), now says it is more likely to be at the end of the year.

In a statement the regulator said: “We’ve received a letter from the Ministry of Justice [MoJ] advising us that the parliamentary process will not be complete to enable the SRA to regulate ABS by 6 October.

“This is due to discussions with the MoJ to finalise the regulatory appeal process for ABSs, and provisions to enable the SRA to check spent convictions of potential owners.”

Irwin Mitchell, which has openly declared its intention to be the first to implement changes allowed by the LSA, has criticised the delay.

Managing partner John Pickering said the firm had long anticipated that the changes would come into force on 6 October. “We’ve been working to that date, its very disappointing that it’s not going to happen,” Pickering said.

In April Irwin Mitchell appointed Espirito Santo Investment Bank to advise it on opportunities for outside investment (20 April 2011).

The firm is widely expected to go public with an IPO. In April, Pickering told The Lawyer that the firm aimed to raise £50m to enable it to go head-to-head with mid-tier firms (25 April 2011).

Pickering said the uncertainty created by the latest announcement on ABSs was “frustrating”.

“When you’re dealing with an exercise like this you want to have certainty of the date,” he said.

The SRA added: “We’ll continue to work with the MoJ to ensure the necessary processes for the SRA to become a designated licensing authority for ABSs are completed as soon as possible.”