*/
The government has published proposals to loosen the ‘onerous and prescriptive’ rules for new legal businesses.
Announcing the consultation, Legal Services: Removing the barriers to competition, justice minister Lord Faulks said that since their introduction in the Legal Services Act 2007, contrary to the fears of many, alternative business structures (ABSs) ‘have not been shown to attract any greater regulatory risk than traditional law firms’.
Since 2010, when ABSs were first licensed, more than 600 have been formed.
Faulks said that their introduction, particularly those that have access to external investment and business and commercial expertise, has benefited the market more widely.
‘These new, innovative providers have increased competition in the market, which we believe encourages the market to provide a wider variety of legal services that are more accessible and affordable to consumers,’ he said.
As a result of concerns raised at the time about the potential risks of these ‘new and unknown business models’, Faulks said the legislative framework for ABS regulation is more ‘onerous and prescriptive’ than for traditional law firms, which acts as a ‘deterrent and an unnecessary barrier’ to firms wanting to innovate or enter the market.
‘The proposals set out in this consultation aim to enable legal services regulators to reduce regulatory burdens on ABSs, while taking a more effective risk-based approach to regulation,’ he said.
Meanwhile, in its interim report on legal services, the Competition and Markets Authority (CMA) provisionally found that, despite some positive developments, such as the increased use of fixed fees and more commoditised services, competition in legal services for individual and small business consumers is ‘not working as well as it might’.
It suggested that competition is hampered by a lack of upfront information about price and quality.
The CMA noted the ‘complexity’ of the current regulatory framework, but said that it does not create ‘significant’ barriers to entry or distort competition.
It said that it is ‘open to more fundamental change’ of the legal regulatory regime, but doing so risked increased regulation, cost and uncertainty.
The Bar Council and Bar Standards Board welcomed the report and said they would engage with each other and the CMA to consider ways in which information about the services provided by the Bar might be improved for the benefit of consumers.
Bar Chairman, Chantal-Aimée Doerries QC said: ‘It is important that the market for legal services functions efficiently, in the interests of access to justice, and in a way which ensures that consumers’ needs are met.’
The government has published proposals to loosen the ‘onerous and prescriptive’ rules for new legal businesses.
Announcing the consultation, Legal Services: Removing the barriers to competition, justice minister Lord Faulks said that since their introduction in the Legal Services Act 2007, contrary to the fears of many, alternative business structures (ABSs) ‘have not been shown to attract any greater regulatory risk than traditional law firms’.
Since 2010, when ABSs were first licensed, more than 600 have been formed.
Faulks said that their introduction, particularly those that have access to external investment and business and commercial expertise, has benefited the market more widely.
‘These new, innovative providers have increased competition in the market, which we believe encourages the market to provide a wider variety of legal services that are more accessible and affordable to consumers,’ he said.
As a result of concerns raised at the time about the potential risks of these ‘new and unknown business models’, Faulks said the legislative framework for ABS regulation is more ‘onerous and prescriptive’ than for traditional law firms, which acts as a ‘deterrent and an unnecessary barrier’ to firms wanting to innovate or enter the market.
‘The proposals set out in this consultation aim to enable legal services regulators to reduce regulatory burdens on ABSs, while taking a more effective risk-based approach to regulation,’ he said.
Meanwhile, in its interim report on legal services, the Competition and Markets Authority (CMA) provisionally found that, despite some positive developments, such as the increased use of fixed fees and more commoditised services, competition in legal services for individual and small business consumers is ‘not working as well as it might’.
It suggested that competition is hampered by a lack of upfront information about price and quality.
The CMA noted the ‘complexity’ of the current regulatory framework, but said that it does not create ‘significant’ barriers to entry or distort competition.
It said that it is ‘open to more fundamental change’ of the legal regulatory regime, but doing so risked increased regulation, cost and uncertainty.
The Bar Council and Bar Standards Board welcomed the report and said they would engage with each other and the CMA to consider ways in which information about the services provided by the Bar might be improved for the benefit of consumers.
Bar Chairman, Chantal-Aimée Doerries QC said: ‘It is important that the market for legal services functions efficiently, in the interests of access to justice, and in a way which ensures that consumers’ needs are met.’
Sam Townend KC explains the Bar Council’s efforts towards ensuring a bright future for the profession
Giovanni D’Avola explores the issue of over-citation of unreported cases and the ‘added value’ elements of a law report
Louise Crush explores the key points and opportunities for tax efficiency
Westgate Wealth Management Ltd is a Partner Practice of FTSE 100 company St. James’s Place – one of the top UK Wealth Management firms. We offer a holistic service of distinct quality, integrity, and excellence with the aim to build a professional and valuable relationship with our clients, helping to provide them with security now, prosperity in the future and the highest standard of service in all of our dealings.
Is now the time to review your financial position, having reached a career milestone? asks Louise Crush
If you were to host a dinner party with 10 guests, and you asked them to explain what financial planning is and how it differs to financial advice, you’d receive 10 different answers. The variety of answers highlights the ongoing need to clarify and promote the value of financial planning.
Most of us like to think we would risk our career in order to meet our ethical obligations, so why have so many lawyers failed to hold the line? asks Flora Page
If your current practice environment is bringing you down, seek a new one. However daunting the change, it will be worth it, says Anon Barrister
Creating advocacy opportunities for juniors is now the expectation but not always easy to put into effect. Tom Mitcheson KC distils developing best practice from the Patents Court initiative already bearing fruit
National courts are now running the bulk of the world’s war crimes cases and corporate prosecutions are part of this growing trend, reports Chris Stephen
Let’s hear it for the assessors, says Dame Anne Rafferty of the KC Selection Panel. And to make silk assessors’ lives a little easier when applicants come calling in May, Dame Anne fields some commonly asked questions