Law firms plan will not give cowboys free rein

Salans says moves proposed in a government white paper will not mean cowboys are free to buy and run law firms, despite industry concerns.

The plans were published last week and propose that external companies would be able to take 100% ownership of law firms, meaning they could be floated on the stock market.

The regulation of the legal profession is undergoing changes and the plans form part of these.

The Legal Services Board will be the single regulatory board for the profession. While the Law Society and the Bar Council, the professional bodies of solicitors and barristers respectively, will remain in place, those in the legal profession will need to satisfy LSB requirements.

Though the changes will mean non-lawyers will be able to own a law firm, they will have to go through the LSB to be gain permission. The firm will be required to make sure there is in place a relevant proportion of lawyers to non-lawyers for the type of legal work they will be undertaking. For instance, a firm that undertakes probation work is likely to need more lawyers as compared with non-lawyers than is a conveyancing firm.

Caroline Havers, partner at Salans, says: “If a company decides it wants to own another company that will offer conveyancing I presume it will have to go to the LSB, which will decide if it is fit to own it.

“The firm would probably have to say it intends to have in place a certain proportion of lawyers to non-lawyers and the board will decide if that proportion is adequate.”