Ministry of Justice
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Law firms to allow non-lawyer partners
Measures to improve the service that legal firms can give to consumers come into effect today.
Different types of lawyers and non-lawyers can jointly own legal firms, after restrictions on the way the firms operate were removed. This will encourage more effective competition and these firms will be able to provide a range of legal services to consumers, increasing access to justice.
For the first time, by forming Legal Disciplinary Practices (LDPs), law firms can be owned by different types of lawyers, and a proportion of non-lawyers. LDPs are an important milestone on the journey to alternative business structures, which will allow for full non-lawyer ownership and for law firms to be listed on the stock exchange.
Justice Minister Bridget Prentice said:
"This is a big step towards realising the vision set out in the Legal Services Act and improving access to justice. There are real benefits for the legal profession and consumers alike in allowing different types of lawyer and non-lawyer to work together."
"The reforms will allow firms to operate in flexible ways and encourage more effective competition, leading to innovation and price reductions. It will also be easier to retain and reward high- quality non- legal staff in firms, as they can now become partners.
"This is the first step towards the full implementation of Alternative Business Structures, which will enable consumers to obtain services from one business entity that brings together lawyers and non-lawyers, increasing competitiveness and improving services.
The Solicitors Regulation Authority, the regulatory arm of the Law Society, is planning to regulate these new types of practice from today. Previously, Law Society-regulated bodies could only be owned by solicitors. Similarly, powers have been commenced which allow the Council for Licensed Conveyancers to regulate LDPs.
Antony Townsend, Chief Executive of the Solicitors Regulation Authority, said:
"The arrival of LDPs is part of the reform of our regulatory role, enabling us to regulate the firms in which solicitors practise as well as individuals, enhancing public protection, and opening up the legal market to new forms of business. These additional powers granted under the Legal Services Act will help us to put consumer and public interest at the heart of regulation."
David Edmonds, Chairman of the Legal Services Board, has said:
"A key priority of the Legal Services Board is to open up the legal services market in the interests of consumers. Allowing some legal services to be provided in a more flexible way is an important milestone. It is another stage in modernising the regulation of the legal services. Removing outdated restrictions will benefit consumers. This should be a real step towards a more fundamental shift in opening the legal services market to alternative business structures."
Notes to Editors
1. The Legal Services Act gained Royal Assent on 30 October 2007. The Act makes three fundamental changes to the regulation of the legal profession in England and Wales. It provides for:
* A new Legal Services Board (LSB) to act as a single, independent and publicly accountable regulator with the power to enforce high standards in the legal sector. The chair of the Board will always be a lay person.
* A single and fully independent Office for Legal Complaints (OLC) to remove complaints handling from the legal professions and restore consumer confidence.
* Alternative Business Structures (ABS) that will enable consumers to obtain services from one business entity that brings together lawyers and non- lawyers, increasing competitiveness and improving services. Further information on ABS can be found at http://www.justice.gov.uk/publications/abs-fact-sheet.htm.
2. The three instruments that enable LDPs are:
* The Legal Services Act 2007 (Commencement No. 4, Transitory and Transitional Provisions and Appointed Day) Order 2009,
* The Solicitors' Recognised Bodies (Amendment) Order 2009 and
* The Licensed Conveyancers (Compensation for Inadequate Professional Services) Order 2009
3. Further information can be found on the Ministry of Justice website at: http://www.justice.gov.uk/news/newsrelease301007a.htm.
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