Ross MacKay, Partner in Private Client and Financial Services, HBJ Gateley Wareing

Time to grasp the nettle and make it work
 
Ladies and gentlemen, please take your partner for the ABS Waltz. Or members. Or shareholders. Or stakeholders. Or outside investors.  It will, sooner than you think, be your choice.

As you will hopefully be aware, the First Minister announced on 3rd September 2008 that as part of the Scottish Government’s programme for the forthcoming Parliamentary Session (2008/2009) they will be presenting what is currently termed the Legal Profession Bill.  The First Minister announced that this will be the first significant reform of the legal profession since 1980 and is intended to “introduce alternative business structures to the legal profession while maintaining the profession’s independence and strength”.

The Law Society of Scotland policy paper “Delivering Scottish Legal Services” was published earlier this year and approved by the profession at the Law Society AGM held in May 2008.  This proposes the introduction of Alternative Business Structures such as Legal Disciplinary Practices (LDPs), Multi-Disciplinary Practices (MDPs), the possible introduction of external investment or capital and in effect a complete reappraisal of the management and ownership of corporate vehicles providing legal services to the public.  The Law Society is to be congratulated on putting forward wide-ranging and detailed policy proposals designed to improve the competitiveness and hopefully business efficiency and profitability of Scottish solicitors as an overall business group. 

As is always the case, there is a long distance between the drafting cup and the legislative lip. There will be numerous issues to be debated, considered and implemented before the first ABS is up and running.  In no particular order of importance for example, new rules and regulations will have to be framed covering such issues as conflict between different professional codes; the role and even existence of the Guarantee Fund; the scope of the Master Policy for indemnity cover; restrictions on legal professional privilege; the proper provision of justice across the whole of Scotland both rural and urban; and the governance and compliance regimes of any organisation providing legal services.  The issues and principles are complex but, one hopes when debated and agreed, the details will follow without (too much) difficulty.

 What is heartening however is that for once legislation designed to reform the structure of  the legal profession is open for considerable input and discussion by the profession itself.  Whilst inevitably the Scottish Government (quite properly) will have the final determination on such matters, one would hope that the profession will accept the challenge of considering and debating the detail of the legislation so that it works in the best interests of the profession as a whole.  It is almost 30 years since the last substantial piece of legislation was put forward (Solicitors (Scotland) Act 1980) and, dare I say it, this may be the one and only opportunity for a large part of the profession to put in place appropriate regulations for the younger generation newly entered, or just about to enter, the legal services market at this time thus ensuring that the new generation have an appropriate framework to take them well into the 21st century.