No Tesco law, but "middle way" sought
28 May 07
MacAskill looking at changing the rules to allow law firms to raise external capital
The Cabinet Secretary for Justice Kenny MacAskill has said that the Scottish Executive could implement a version of the Clementi reforms, due to be enacted in England and Wales later this year, according to an article in today's Herald.
At present only practising solicitors can be partners of, or shareholders in, Scottish law firms. This means that firms which employ other professionals such as accountants or investment managers, or a non-lawyer chief executive, are unable to reward them with a stake in the firm. Also they can only finance investment for growth by capital contributions from the partners, or by borrowing money.
Once the Legal Services Bill is in force, English firms will be able to raise external capital to fund expansion or systems development. The larger Scottish firms, many of which have offices in England and compete for corporate work with English practices, made representations to the previous Executive that a level playing field should be maintained.
Mr MacAskill is contemplating removing the ownership restrictions on Scottish law firms, while not going as far as allowing businesses such as banks, supermarkets and insurers to employ lawyers to provide legal services for their customers.
Concerns remain within the profession that the core professional values of independence and confidentiality could be compromised if ownership were permitted to be relaxed to that extent.
Recently Australian law firm Slater & Gordon became the first law firm to list its shares on the stock market following changes to Australian legislation.