Alternative business structures are the way forward for the legal profession - Rob Aberdein

The era of alternative business structures (ABS) in the Scottish legal profession is imminent. It won’t cure all the ills of the industry, nor will it offer up solutions to the entire spectrum of challenges faced by those working in the legal sector north of the border. I believe it will, however, bring many benefits to lawyers and their clients.

I was quite surprised and disappointed therefore to see the American Bar Association (ABA) last week reaffirm its opposition to non-lawyers owning law firms. Despite ABS structures being allowed in some territories in the US (Utah, Arizona) a resolution was unanimously passed, having been proposed by the Illinois State Bar Association (ISBA), that described non-lawyers owning law firms as being “inconsistent with the core values of the legal profession”.

The result was welcomed in lofty terms by ISBA President, Rory Weiler, who declared that: “In an age where other professionals are being bought and sold like commodities, the ABA’s House of Delegates reaffirmed a decades-old ABA policy that non-lawyer ownership of law firms, is anathema to the legal profession and in direct conflict with the core values that have sustained our profession for generations. In the legal profession, protection of the public, particularly against predatory pecuniary policies is paramount, and will continue to be the primary focus of our profession.”

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Whilst my old English teacher would be impressed with Mr Weiler’s use of alliteration, this sort of grandstanding feels, at best, like headline-grabbing PR and, at worst, deeply disingenuous, not to mention worrying, as an indication of where the legal profession is today and where it should be heading in future.

Rob Aberdein is Managing Director, Moray Group, which includes Simpson & Marwick
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In my view, ABSs will open up the potential for firms to access much-needed investment that can often be difficult to obtain in the traditional structure. This capital will allow firms to invest in innovation that can deliver more efficiencies and better customer journeys. This is not robots, AI and deskilling – it will be taking valuable lessons and implementing successful, road-tested strategies from other sectors and elsewhere in professional services in order to deliver more for clients.

Competition creates a culture of continuous change (two can play at the alliteration game). With more firms pushing boundaries and driving change, it will force their competitors to adapt or die which will drive improvements that are good for clients. Investment will also bring more choice and more choice will inevitably offer more value and bring down costs, something that’s often a primary determinant when choosing a lawyer.

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Amongst the anti-ABS naysayers, there are also those who are concerned about the threat to the legal profession’s independence. This notion ignores the widely accepted success of ABSs in Australia, England and Wales as well as the existence of the UN’s Basic Principles on the Role of Lawyers, which protect independence by identifying and enshrining certain factors that demonstrate its presence in the legal profession.

Non-lawyer ownership does not bring an existential threat to the independence of the profession nor to lawyers themselves and, for me, embracing the positives of ABSs is the best way forward for Scotland, the US and many more countries besides. It’s an approach that will encourage healthy competition, drive positive change, help fund investment in innovation and technology and offer better value and more choice for consumers.

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Rob Aberdein is Managing Director, Moray Group, which includes Simpson & Marwick

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