Dead on arrival: nobody is interested in alternative business structures

Alternative business structures are dead. Well, as one pedantic wannabee law business pointed out, they have not come in to existence, so maybe stillborn is a more accurate term.

The Legal Services Act 2007 allowed for non-lawyers wholly to own and run businesses offering the full range of legal services, including all reserved activities, subject to having just one lawyer on board '“ the head of legal practice. Finally, on 6 October 2011, such beings came into existence, or, rather, just one being: a conveyancing business regulated by the Council of Licensed Conveyancers. Indeed four years after the Act received Royal Assent there is still no regulator in place in relation to litigation matters conducted by ABSs.

The first surprise is that the Institute of Legal Executives, a body for which I have the highest regard, chose not to become a regulator, even though on the face of it their members had the most to gain from liberalisation of the ownership and control of law businesses. The Legal Services Board '“ the overarching regulator '“ will not, as first thought, be a frontline regulator. The Bar Council is not yet an ABS regulator and the Solicitors Regulation Authority did not manage to get itself ready for the big bang and is talking about being ready in early 2012. I have not yet formed a clear view of the SRA as our regulator, but it is looking increasingly likely that they have been very clever and have judged the public mood correctly, as indeed has the governing body of legal executives.

This is the dog that did not bark in the night. On the face of it the failure of the SRA to be in place as a regulator four years after the Act was passed looks like turkeys postponing Christmas. One might have thought that there would be howls of protest about the SRA protecting its own, but there has been nothing.

Off the radar

The SRA says it has had just 50 enquiries. Given that there are approaching 11,000 solicitors' firms, as well as more than 3,000 claims management companies, that is astonishing. This almost complete lack of interest, mirrored in the numbers attending, or not attending, courses on the subject, explains the lack of press comment '“ they know that no one is interested. As for the public it is simply not on their radar.

It is often said that people overestimate the change likely in the first year but underestimate the change likely in five years. True, but it depends when the clock started running. By one count that was 6 October 2011, but by another it has already been running for four years. With the financial services big bang it was just that '“ a big bang. ABSs look like being the biggest legal damp squib ever.

So, why? Mainly because it was a crazy idea to start with, as I pointed out in these very pages on 4 November 2005, encapsulated in the fatuous statement of the gone and not lamented Bridget Prentice, that: 'I don't see why people shouldn't be able to get legal services as easily as buying a tin of baked beans.'

Let us have the airline services bill; people drive cars, so let them fly jumbo jets with the passengers taking it in turn. This would cut costs as no pilots would need to be paid and it would generate extra revenue from the additional passengers in the cockpit. Very efficient and very green.

Follow it up with the medical services bill '“ let anyone practice medicine. This would allow the Co-op to offer a one-stop service with a free funeral if medical treatment did not work.

Then there is the services element. Obviously solicitors' clients are just crying out for the friendly, caring, personal services that they don't get from the banks, insurance companies and utility providers.

Sainsburys' Homeserve has reduced to 40 days the time it takes to respond to a complaint '“ well, we will all have some of that won't we?

I have not quite worked out the psyche of the ABS evangelists but many are qualified lawyers who have not made it in private practice.

The public recognises that the practice of law is an extremely skilled and difficult profession, as are teaching and medicine and the priesthood and indeed piloting an aeroplane. If people want to be lawyers, teachers, doctors, etc. then there is a simple answer '“ study, train and pass the exams.

In March 2010 the Ministry of Justice published a research paper entitled Baseline survey to assess the impact of legal services reform (available at www.justice.gov.uk/publications/research.htm). It found that 95 per cent of respondents agreed that the lawyer acted in a professional manner. Likewise, 96 per cent agreed that the lawyer explained things in a way that the client could understand, 94 per cent agreed that the lawyer was approachable and 91 per cent felt that they had received a good service. And so on. As we elitist lawyers say '“ res ipsa loquitur '“ it speaks for itself.

So, please ABS evangelists, stop pretending that legal services reform is anything to do with the interests of the public. It is all about big businesses seeking to practise law as badly as they run their own businesses. RIP Legal Services Act.