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First ABS to open doors on 6 October 2011

23 February 2010

The first ABS will open for business on 6 October 2011, David Edmonds, chairman of the Legal Services Board, has said today.

As promised, firms wanting to become alternative business structures will be able to apply for a license in “mid-2011”.

Describing the timetable as “challenging, but realistic”, Edmonds said: “It gives time for regulators to prepare their licensing framework for ABS – frameworks that we will ensure focus on outcomes for consumers, rather than over-complicated rules that stifle innovation and better value.

“We have been clear that we want traditional firms to have similar flexibility as well. So we welcome the commitment of the SRA to move ahead with outcome-focused regulation on a similar timetable.”

In a speech at Inner Temple last night, Lord Neuberger, the Master of the Rolls, warned that solicitors and barristers would face new “ethical dilemmas” as a result of ABS, such as “the conflict between the commercial duty to maximise shareholder return and their professional duty to the court, their client or their professional independence”.

Lord Neuberger went on: “Let me be clear, I am not saying that we should not enter the world of the ABS or MDP. Parliament has spoken on that point and has provided the statutory basis for real innovation in the way in which legal services are provided. “The regulatory challenge is to ensure that these new structures do not in fact produce a reduction in professional ethical standards. It is a challenge squared by the introduction of a move towards principle-based regulation.

“The challenge facing the LSB, the SRA and the BSB is to ensure that these new practice structures and forms of regulation maintain the professional standards for which the English legal profession has long been rightly respected.

“Innovation is not to be feared or shied away from,” he said. “But it should be approached with all due care and attention in the public interest.”

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