Law Society of Scotland hopes for first ABS applications by end of year

The Law Society of Scotland has submitted the first draft of a regulatory framework for ABSs to the Scottish government, in the hope of receiving the first applications by the end of the year.

Under the Legal Services (Scotland) Act 2010, ABSs with 100 per cent external ownership will be allowed north of the border, so long as there is majority ownership by solicitors or other professionals, such as accountants or surveyors. They will be known as ‘licensed legal services providers’.

Phillip Yelland, director of regulation at the society, said: “We are hopeful that the Scottish Government will confirm it is content with the direction of travel we’re going in with our draft regulatory scheme so far.

“However we are limited in what we can do until the government introduces regulations on some key issues such as spent convictions, similar to those promulgated in England and Wales, and regulations relating to investors, to allow us to flesh out our draft regime for licensed providers in Scotland.”

Yelland said growing numbers of law firms had inquired about becoming a licensed provider.

He said: “There has been an upsurge of inquiries from solicitors’ firms, both large and small, who are considering how they might develop their existing business model under the legislation.

“You only have to look at what’s happening in the marketplace with the number of recent cross border mergers to realise that solicitors are considering what the best model is for their business moving forward and ABSs are part of those discussions.

“As a regulator, we want to see consistency of regulation and standards. All individual solicitors will continue to be regulated by the society and I think it’s important that we can also regulate new types of legal services businesses to ensure that there is consistency right across the legal services sector.”

Yelland added: “While we don’t have control of the timetable as to when ABS will come into being, we are making progress and it may be that by the end of the year we start to see the first ABS applications.”

In a separate development, niche technology and media firm Halebury has announced plans to become an ABS. The London firm employs a team of lawyers, who work with companies as in-house consultants.

Former Charles Russell solicitor and co-founder Denise Nurse said: “As well as recruiting more solicitors, our next development will be becoming an ABS, which we hope will give us greater access to finance and a strong platform for continued growth, both in the UK and internationally, making it an even more attractive proposition for solicitors and clients.”