Scottish lawyers poised to vote on radical changes to profession

SCOTLAND'S lawyers will vote this week on a planned shake-up described as the most important change to the profession in its history.

Alternative Business Structures (ABS) – which have already been approved in England and Wales – give law firms greater flexibility in the way they are run as businesses, such as permitting the investment of external capital, promoting non-lawyers to the partnership and offering combined services, including accountancy or surveying.

Lawyers across the country have been submitting proxy votes ahead of Tuesday's deadline and a further vote will be collected at the special general meeting of the Law Society of Scotland at Murrayfield on Thursday.

Many of these firms are already united in their support of the ABS initiative which is part of the Legal Services Bill in Scotland. The Bill would allow Scottish firms to develop their businesses to better meet clients' needs and without it there is a risk that Scotland's law firms will be left unable to compete.

Many law firms head-quartered in England and Wales have offices in Scotland, just as many Scots firms have successfully grown south of the Border – and thrive on that competition. In England and Wales the Legal Services Bill has already passed into law.

The UK market for legal services is highly competitive. Work is often won through competitive bidding where factors such as price, experience, training, quality assurance, project management, use of IT and service delivery methods can influence success.

Investment and innovation in these areas can lead to competitive advantage. At present there is a level playing field as regards the regulatory structure of law firms across the UK. If that changes next year then it is possible that the competition based in England and Wales but operating in Scotland will be better capitalised and better placed to compete and to attract and retain talented lawyers.

Kirk Murdoch, joint senior partner at McGrigors, said: "McGrigors competes on a national scale for our work, with legal giants like DLA and Eversheds who are registered in England and Wales. From next year these firms will have access to ABS. If we don't get the same access we may lose our ability to compete."

Austin Lafferty, of Austin Lafferty Solicitors, said: "The OFT recommended lifting the current restrictions to benefit consumers and lead to innovation. Whilst many in the legal profession had and have doubts about some of the OFT positions and lack of evidence backing up the recommendations, ABS is overall about bringing the legal industry into the 21st century and our clients will feel the benefit."

Patrick Andrews, chief executive of Shepherd and Wedderburn, said: "ABS has been characterised by some as a threat to the profession but I see it as a real opportunity to reinforce and enhance the reputation of the Scottish legal profession by giving law firms the flexibility they need to choose how to grow their businesses."

Johnston Clark, managing partner at Blackadders, said: "There's a misconception that ABS is only useful to the largest law firms. That's just not true. Blackadders is a midsize firm but we are ambitious and want the option to access ABS to develop our services to meet our client's changing needs."

The Scottish Law Agents Society (SLAS) is opposed to the introduction of ABS. Robert Forman, a member of the council of SLAS and head of private client services in the legal firm McKay Norwell, Edinburgh, said: "SLAS is not against reform per se but is convinced that ABS is a step too far. It is a threat to the centuries-old independence of Scotland solicitors.

"An essential part of a modern democratic state is that there should be a legal profession free from control from outside interference and from state control. European law backs this position and it should be a matter of great concern that independence will be lost."