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Legal profession fused through back door – and it’s the bar that left it open

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In a landmark move, barristers’ regulator gears up to authorise 15 new “entities” that look and smell a lot like solicitors’ firms — and will compete with them

backdoor

The legal professions of England and Wales finally fused yesterday in all but name — and not so much with a bang, but a whimper as the bar’s regulator quietly announced it was giving the green light to barrister-run law firms that will compete directly with traditional solicitors’ practices.

According to a Bar Standards Board (BSB) statement, 15 “entities” are on the brink of being unveiled once they have arranged professional indemnity cover.

These BSB-regulated businesses — which must be “advocacy-focussed” — will allow for partnerships between barristers, solicitors and other lawyers.

Since implementation of provisions in the Legal Services Act 2007, the Solicitors Regulation Authority has been authorising alternative business structures that allow solicitor-barrister partnerships. But this move from the bar’s side of the profession effectively completes the unofficial fusion circle.

As the BSB itself explained in its statement:

“Entities are companies or partnerships that provide advocacy, litigation, and expert legal advice services. Previously, the BSB only regulated individual barristers. The BSB is now able to regulate businesses owned and managed by barristers and other lawyers.”

The BSB clarified that it was not authorising ABSs, as those bodies go a step further, allowing non-lawyer owners and managers. However, the regulator said it would soon apply to the Legal Services Board to become an ABS licensing authority, a move that will put it in direct regulatory competition with the SRA.

The main difference between the new BSB-regulated entities and solicitor’s firms is that the former will not handle client funds. Explained a BSB spokesman:

“What we’re doing is providing an opportunity for barristers to come up with new business models and ways of delivering services. We hope this will enable them to compete in an increasingly competitive market and, ultimately, help consumers by expanding the range of services available to them.”

Commenting on yesterday’s announcement, the BSB’s director of supervision, Oliver Hanmer, said:

“Our aim is to provide those wanting to specialise in advocacy, litigation and specialist legal advice with a specific and focussed regime … We know from our conversations with members of the bar that there is real enthusiasm for entities regulated by us. I’m sure these 15 are just the beginning.”

The BSB will not reveal the names of the 15 entities until they have put insurance arrangements in place; they have 21 days to do so.

The Bar Council — which represents barristers in England and Wales — gave a clear indication that the new entities would go head to head with solicitors’ firms for crucial areas of work. A council spokesman told Legal Cheek: “We are also researching how entities could engage in direct contracting with local authorities, business and the Legal Aid Agency.”

Hanmer referred to difficult economic conditions and the increasingly competitive environment pressing down on the bar as forming the rationale for the move.

“Against what is for many a backdrop of uncertainty and change,” he said, “we hope this will give barristers and other lawyers more freedom to react to changes in the market and to devise new ways of working so as to remain competitive and best serve their clients. I would urge those thinking of applying or interested in finding out more to get in touch with us.”