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President urges solicitors to unite behind Society motion

24 May 2010

The President of the Law Society of Scotland has appealed to Scottish solicitors to rally behind the Society's motion on alternative business structures (ABS) at the Society’s Annual General Meeting on Thursday this week.

Three motions on the subject of ABS will come before the meeting. The motion from the Society’s Council supports its recent change of policy away from permitting any level of external ownership of a legal practice, to permitting external investment provided that majority ownership (at least 51%), management and control of law firms remains with solicitors alone or together with other regulated professionals.

The second motion, proposed by Mike Dailly of Govan Law Centre, would allow up to 25% of a firm to be owned by non-solicitors, who must also be involved in the firm. It would prevent all forms of external capital.

The third motion, put forward by the Scottish Law Agents Society (SLAS), reaffirms the motion passed at the recent Special General Meeting, and would prevent all forms of ABS.

Mr Smart said: "Throughout the debate on legal services reform and the proposed introduction of new business structures, the unity and reputation of Scotland’s 10,500 solicitors has remained uppermost in the minds of those at the Society who develop and promote policy. The Society’s Council has therefore put forward a motion that takes into account three important votes: the 2008 AGM decision to support any form of ABS; the 2010 Special General Meeting decision to overturn that position; and the recent independent referendum in favour of new structures, as long as appropriate safeguards are in place."

Solicitors had a choice, he argued. "They can rally behind a motion that promotes a compromise on alternative business structures and has the potential to unite the profession. Or they can back a position that, I believe, will fail to provide a long-term solution for the profession in a fast changing legal marketplace."

Of Mr Dailly's proposal he said: "A compromise needs to be acceptable to both sides if it is to unify. Unfortunately, the Council does not believe this goes far enough to satisfy the needs of our members who are competing with firms south of the border and, therefore, will fail to reunite the profession."

He added that with a split already apparent, doing nothing was unsustainable. "Rather than resolving the issue conclusively, endorsing the SLAS motion could cause further division during the process of enacting and implementing the Legal Services (Scotland) Bill. Ultimately, MSPs will decide what form ABSs take, not the Society or anyone else. However, there is cross-party support behind the principle of reform and adopting an anti-ABS policy would damage the credibility of the profession and weaken our voice at a critical time in the legislative process."

Click here to read Ian Smart's comments in full.


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