Barristers make historic move into partnership

Barristers will be able to join LDPs as partners and set up barrister-only partnerships, the Bar Standards Board has decided in a historic move.

However, the BSB is discouraging barrister partners from becoming shareholders until guidelines are drawn up to avoid conflicts of interest.

Well over 100 LDPs, employing over 75 non-lawyer partners, have been created since 31 March this year.

Baroness Deech, chair of the BSB, said the changes were a 'shot of adrenalin' for struggling barristers rather than a free for all.

The BSB is yet to decide whether barristers should be able to participate in externally-owned ABSs, or those with more than 25 per cent non-lawyer partners.

All LDPs containing non-lawyers will be regulated as alternative business structures once the ABS regime comes into force. This is expected to happen in the second half of 2011.

Barristers wanting to form barrister-only partnerships will have to wait for the results of a consultation.

'In relation to barrister-only practices, we can see real benefits in such entities being able to better share risk,' Baroness Deech said. 'For example, such entities may be able to offer greater access to justice through a willingness to operate conditional fee agreements where individual practitioners feel unable to bear the risk of doing so.

'In deciding to apply the cab-rank rule to advocates in barrister-only entities and to seek to apply that rule to all advocates, the Board wishes to preserve a unique attribute of the Bar, in the public interest, one the Lord Chief Justice has described as 'essential to the administration of justice'.'

Nicolas Green QC, chairman elect of the Bar Council, said the BSB's announcement represented 'an historic moment' for the Bar.

Russell Wallman, director of government relations at the Law Society, said the decision of barristers to enter LDPs was 'good on the whole' for solicitors.

'It's helpful that they can finally participate in these firms without having to go through extra hoops to do so.

'It is something of a mystery why barristers have been so reluctant to set up their own partnerships.'

In a separate development, law centres, CABx, advice agencies and trades unions are to be given a year's 'grace' to prepare for regulation as ABSs.

Following the licensing of the first ABSs in mid-2011, the LSB said in a consultation paper that LDPs containing non-lawyers would also be given an extra year to prepare.

The Legal Services Act provided that the regulation of 'special bodies' such as law centres, CABx, advice agencies and unions could be less burdensome because of the public benefit they provided.

However, the LSB said it believed it was 'not in the interests of the public nor of the special bodies themselves for there to be significant and prolonged departures from the essentials of the regulatory regime.'

Julie Bishop, director of the Law Centres Federation, said: 'We would have preferred to be in a special category because we're different from Tesco and from CABx.

'However, we would like to be within some regulatory framework and since ABS is available, we will comply with that. The detail will determine the impact it has on us.'

Elsewhere in the consultation paper the LSB said that every ABS must at all times have a 'head of legal practice,' to ensure the firm complies with the terms of its licence, and a 'head of finance and administration', in charge of compliance relating to accounts.

The LSB proposed that licensing authorities should have the power to impose unlimited fines on individuals or firms which broke the rules.

The super-regulator argued strongly against the idea that the proportion of external ownership of an ABS should be restricted.

'In terms of the actual ownership of an ABS, we believe that strong ownership tests mean that there should be no restriction on how much of the business non-lawyers will be allowed to own.'