Non-lawyers could offer legal services by 2011
A consultation paper containing detailed proposals for reforming the delivery of legal services in England and Wales has been published by the Legal Services Board (LSB).
The publication, Alternative business structures: approaches to licensing, is a major milestone in the process of reforming legal services regulation that began with the Legal Services Act 2007, following the report by Sir David Clementi.
The new rules will allow banks, building societies and others to offer legal advice to the public, and to take over law firms if they wish to do so. New services could include conveyancing, will-writing, legal helplines, ID theft advice, help with writing legal documents, inheritance tax advice, probate and accident management services.
Chairman of the Legal Services Board David Edmonds said: “We are proposing the introduction of a common and consistent licensing framework for those lawyers and firms – and those who would like to invest in legal service provision – which should promote wider choice and variety and which has robust consumer protection at its heart.
“The new proposals give lawyers – and new business partners - much greater flexibility in how they organise and collaborate with each other and also other professionals.
“We want to encourage new entrants into the legal services market to bring new ways of working and new competitive pressures. These will increase choice for consumers, whilst offering better-tailored and better value packages of professional services.”
Summary of the paper
The paper proposes removing restrictions that have, until now, prevented non-lawyers from owning legal service businesses. The new rules will mean that lawyers will have new freedoms to provide their services alongside services from non-lawyers, and for existing legal practices to attract new external investment.
A robust framework of consumer protection, professional competence and commercial integrity is at the heart of proposals. The LSB is currently consulting on guidance to govern the licensing of these new models of service delivery. There are three key protections:
- a test to ensure that non-lawyer owners and managers of new forms of legal practice are fit and proper;
- the introduction of two new roles in every new firm: the Head of Legal Practice and Head of Finance and Administration who will ensure compliance with licence requirements;
- a widening of the complaints handling system to deal with complaints about firms that do not deliver legal services in isolation but instead offer these alongside other services (for example, financial services) while ensuring access to the Office for Legal Complaints.
The new framework has the potential to allow consumers to access their legal services in a variety of new ways, for example, as a part of a 'one stop shop' with other professional services, such as mortgages, insurance, tax advice and accountancy, or through existing legal practices diversifying and developing with the benefit of external investment.
The guidance sets out principles that new ‘licensing authorities’ will be expected to regulate in accordance with, anticipating that the first licences will be issued by mid-2011.
The responsibility for ensuring the removal of current restrictions on individual lawyers preventing them from developing new forms of practice lies with the eight Approved Regulators overseen by the LSB. These ARs are the Law Society, the Bar Council, the Master of the Faculties, the
The legal profession currently consists of around 15,000 barristers, 108,000 solicitors and 14,000 individuals operating in other aspects of the legal profession such as conveyancing. The sector is currently valued at £23.34 billion per year.
The consultation closes on 19 February 2010.
