ABS as term is now obstacle to reform, regulators believe
The term "ABS" (short for alternative business structures) has become an obstacle to legal services reform, according to a blogger who has just returned from the International Conference of Legal Regulators, held in Toronto this week.
Iain Miller, a partner with London firm Bevan Brittan, writes that the term, which derives from the Clementi review in England & Wales and has become shorthand around the world for the external ownership of law firms, is now seen as causing difficulties because of the wide range of scenarios it can cover.
At one end it means "Tesco law", the term popularly used for big brands providing regulated legal services, but a legal practice can become an ABS simply by allowing the finance director or HR director to own a stake in the business or permit employee share ownership schemes.
"This lack of clear meaning has allowed opponents of regulatory changes to frame the debate around the fear of Tesco Law", Mr Miller writes. "A more nuanced debate may lead to a consensus as to what more reforms might be acceptable."
He adds that In England & Wales another issue has arise, in that the term ABS suggests that those firms licensed as such by the Solicitors Regulation Authority are not law firms. The SRA is likely to stop using the term as it causes confusion.
The Law Society of Scotland's proposed regulatory scheme that would permit the introduction of ABS in Scotland is still under consideration by the Scottish Government and the Lord President's office.