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Bar warns against "big bang" implementation of the ABS

17 August 2009

The Bar Council has warned the Legal Services Board against implementing alternative business structures in one “big bang” in 2011.

The Bar said it favoured a “more gradualist” approach, which would leave the introduction of firms offering a range of services, some of them non-legal, until a later date.

In response to the LSB’s consultation on alternative structures, a Bar Council working group welcomed liberalisation in principle, while expressing caution on the consequences.

“Market liberalisation (with a view to promoting access to legal services) may run counter to ‘access to justice’ if it results in the reduction in rural or local law firms or in the numbers of self-employed barristers,” the group said.

“Market liberalisation may also run counter to the further regulatory objective of promoting and maintaining adherence to professional principles (section 1(1)(h)) of the Legal Services Act) if it compromises the quality of legal services because of economic incentives for achieving greater output at lower prices.

“Those professional principles include acting with independence and integrity (section 1(3)(a)), maintaining proper standards of work (section 1(3)(b)) and acting in the best interests of the lawyer’s clients (section 1(3)(c)).”

The working group said it was clear from the LSB paper that promotion of access to legal services might be at the expense of access to justice.

It accused the LSB of prioritising “competition and market liberalisation over access to justice, notwithstanding recent failures of liberalised markets”.

The Bar concluded that the current timetable for the introduction of the ABS was “too tight” and that regulators needed to time consider the successes and problems brought about by the introduction of LDPs.

“In particular, the working group considers that any initial regime for ABS should exclude multi-disciplinary practices in the first place.”

The working party said different problems were raised by MDPs as opposed to LDPs with non-legal management or non-legal ownership.

Russell Wallman, director of government relations at the Law Society, said the society would try and be ready for “big bang” implementation in 2011, but could not guarantee it.

“We don’t know what issues will be thrown up,” he said. “Sorting out LDPs took us longer than we thought and that was much more straightforward.”

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