Neuberger MR calls for regulatory reform as ABS timeline is unveiled

Speaking at the Inner Temple’s lecture series on the theme of professionalism Neuberger MR said there was a “strong argument” for the LSB to revisit the “present regulatory maze”, adding: “We’ve moved from simple self-regulation by representative bodies to a more detailed, more complex, and rather more expensive system.”

Neuberger MR’s comments come as the LSB today announced the timetable for alternative business structures (ABS), with businesses able to apply for licenses from next summer and the first licenses due to be awarded on 6 October 2011.

The regulatory structure will see the LSB act as an overarching watchdog for the Solicitors Regulation Authority (SRA) and the Bar Standards Board. While the SRA is likely to take responsibility for ABSs it is possible that further regulators could be introduced.

In announcing the timetable for ABSs LSB chairman David Edmonds said: “In getting to this position, we’ve worked closely with the SRA, the Council for Licensed Conveyancers (CLC) and other bodies who are considering applying to regulate alternative business structures. I welcome their ambition and commitment to the process.”

However, Neuberger MR questioned the need for additional regulators. He said: “I think it highly questionable from a financial perspective to duplicate regulatory activity and cost, and to produce further cost by ensuring that the various regulators communicate and cooperate with each other to ensure that they have and apply common standards.”

The LSA was introduced to bring about increased competition in the profession, but this can only happen where the same rules are applied to different sectors of the profession, he said.

The MR predicted that the profession of the future would evolve in such a way that the role of barristers and solicitors would be combined into an overarching lawyer role.

He argued: “It seems to me that one effect of market forces operating in the new regulatory environment will be something which has long been resisted here: de facto or de jure fusion of the profession. A modern truth that dare not speak its name.

“This may lead to the position where, as in other jurisdictions, lawyers are admitted as both solicitors and barristers: as lawyers.”

As the fusion draws nearer, he continued, “the rationale for maintaining professional bodies will probably vanish”.

This is not the first time the MR has warned about the “unintended consequences” of the LSA. Speaking to the BBC last summer ahead of the opening of the Supreme Court  he cautioned: “The danger is you muck around with a constitution at your peril, because you don’t know what the consequences of any change will be” (14 September 2009).