Scottish solicitors vote against ABSs two weeks after backing them

Scottish solicitors have voted against the introduction of alternative business structures (ABSs) despite the profession giving them their backing two years ago and again in a referendum earlier this month.

While the Scottish government is preparing to enact the Legal Services (Scotland) Bill, which would pave the way for ABSs north of the border, the Scottish Law Agents Society (SLAS) last month asked for a special general meeting (SGM) to try to persuade the Law Society of Scotland (LSS) to reverse its position of supporting ABSs.

The SLAS had claimed that it was not properly consulted when the LSS balloted its members on ABSs, and won their support, two years ago (23 May 2008).

As the SLAS had organised a large number of proxy votes for the SGM the LSS reconvened the meeting for today (5 April 2010). At the same time the LSS held a referendum on the issue, with the profession giving narrow support for ABSs (7 April 2010).

At the reconvened meeting today 1,817 votes went against the introduction of ABSs while 1,290 voted in their favour. A compromise amendment proposed by McGrigors managing partner Richard Masters was also rejected.

While the LSS is not constitutionally obliged to withdraw its support of ABSs in light of the vote, it does mean that in principle it would have to alter its position. This would make it difficult for the society to work with the Scottish government on drawing up the new legislation.

That said, LSS president Ian Smart said the society plans to continue working with the Scottish government on amendments to the bill and will now work with the SLAS to try to find a new compromise.

“The original SGM was adjourned last month to allow further discussions and attempt to reach a consensus on the best way forward,” said Smart. “We were hopeful that a later compromise amendment on external ownership and external funding would prove an acceptable compromise. Unfortunately there’s been no consensus, although the society will remain in discussion with all interested parties, including the [SLAS] following their stated intention at the close of the meeting to work with the society.

“It’s vital that we remain and move forward as a unified profession despite these divergent views.”

He added: “The SGM vote opposing the introduction of ABSs will now be put to the Society’s Council. The Council will consider both this SGM vote and the narrow vote in favour of ABSs in a referendum earlier this month. The difficult thing is not so much the differing results between the referendum and today’s vote but rather the large numbers on both sides in both votes. Obviously both sides would prefer an agreed way forward, but equally it may be that the differences are unbridgeable. I however have not given up hope.

“There has however to be some cognisance that the government and the Parliament will not dance to the tune of our profession and if we are divided it simply gives them carte blanche to do as they like.”

The LSS council is planning to come up with a new compromise to present to the profession at its AGM in May.