MINISTRY OF JUSTICE
News Release (045/09) issued by COI News Distribution Service on 31
March 2009
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.
http://www.justice.gov.uk
ENDS