The Law Society of Scotland has delivered its first draft of a framework for ABSs – or Licensed Legal Services Providers, as they will be known -- to the devolved Scottish government. The Law Society will apply for ‘approved regulator’ status.

Lawyer ownership

Proposed reform will bring Scotland up to date with practice south of the border, where the first ABSs were licensed under the Legal Services Act 2007 earlier this year. While ABSs in England and Wales can be owned externally, Scottish businesses will require majority ownership by solicitors and/or other regulated professionals, such as accountants and surveyors.
In a statement, the Law Society described the draft as ‘progress’, but confirmed that the reality of ABSs is ‘still some way off in Scotland’. The Scottish government still needs to finalise regulations before the society, or any other group, can apply to become an approved regulator.

Hopeful

Phillip Yelland, the society’s director of regulation, described his organisation as ‘hopeful that the Scottish government will confirm it is content with the direction of travel we’re going in with our draft regulatory scheme so far’.
He added that against a backdrop of increasing interest in ABSs, the need for development has gained support as there had been ‘an upsurge of inquiries from solicitors’ firms, both large and small, who are considering how they might develop their existing business model’. There had also a series of cross-border mergers between English and Scottish firms, illustrating the demand for new regulations.
The timescale for the reforms remains uncertain, although Mr Yelland emphasised that ‘we are making progress and it may be that by the end of the year we start to see the first ABS applications’.