On October 6 the Legal Services Act will come into force and Alternative Business Structures (ABS) will emerge, allowing businesses other than Solicitors to offer a full range of legal services; but will clients be sure that they are receiving the best legal advice?
The Council of Mortgage Lenders’ (CML) response to the formation of ABSs is perhaps the exact concern that many Conveyancing Solicitors have (I know it has run through my mind).
“Given that the fraudulent activity reported to us has been carried out by traditional law firms within a well-established regulatory regime, we are concerned about the consequences of potentially higher-risk ABSs subjected to a reduced level of regulatory scrutiny. ”
The Conveyancing Quality Scheme was launched earlier this year by the Law Society to measure the standard of quality by residential Conveyancing practices and to create a trusted community to deter fraud; lenient requirements for ABSs seem quite contrary to this objective.
Why be regulated at all?
To date, over 500 well-established law firms have demonstrated a level of excellence that goes far beyond anything the Legal Services Act 2007 will achieve in the early stages, by obtaining CQS status.
Buying legal services could soon be easier than purchasing a meal deal at your local supermarket. Businesses will of course have to be licensed but will only be required to employ one qualified lawyer (not necessarily a Solicitor). Although such businesses will be regulated, it remains to be seen whether such firms will put their clients’ interests first, or the interests of their investors in maximising their profits.
The CML also commented that tracking Solicitors who have been subject to regulatory action will be a challenge as owners of ABSs will not necessarily be Solicitors.
October 6th is fast approaching but only time will tell how successful these businesses will be.