The passing of the Legal Services Act marked the dawn of a new era – a move to liberalise the legal sector to open opportunities for innovation to benefit both legal teams and legal services providers.
In this report, we resurface the leading voices that called for change and pioneered the way; explore the impact on legal teams and cast an eye to what the future may hold.
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The Legal Services Act – then and now
On 6 October 2011, English legal history was made when Premier Property Lawyers – one of the country’s largest conveyancing businesses – became the first ever ABS.
It was perhaps less of a landmark than the authors of the Legal Services Act 2007 might have hoped, as it already had external investment. Firms regulated by the Council for Licensed Conveyancers had been able to do so for several years and were required to convert into ABSs. The company has since been bought by private equity, Palamon Capital Partners.
The way the Legal Services Act set up the regulatory regime, the individual regulators could each run their own ABS licensing system. So it was nearly six months later that the Solicitors Regulation Authority (SRA) licensed its first ABS – Oxfordshire high street firm John Welch & Stammers, followed the next day by Co-operative Legal Services. Both are still going strong. Co-operative Legal Services was already a significant business at that time, but becoming an ABS allowed it to offer reserved legal activities. It has recently outlined an ambition to become a £100m business in the next five years (its turnover in 2021 was £39m).
Since then, around 1,500 ABSs have been licensed – mainly, but not exclusively, by the SRA. There are now law firms listed on the stock exchange (e.g DWF, Ince & Co), law firms bought by private equity (e.g. Fletchers by Sun Capital Partners, Stowe Family Law by Livingbridge), law firms run by local authorities, charities, universities and businesses, there are consolidators, multi-disciplinary practices with accountants, surveyors and even funeral directors, and many more besides.
A market ripe for liberalisation
The Act that paved the way for ABSs is often wrongly described as a deregulatory measure. It’s not, however – ABSs are subject to the same regulatory oversight as ‘traditional’ law firms. Rather, the main purpose of the Act was to liberalise the legal sector.
Professor Stephen Mayson, arguably the leading observer of the post-Legal Services Act world, says his expectations at the start were in line with Sir David Clementi, – whose government-commissioned report led to the Act – namely “shifting the market away from one that was dominated by traditional law firm partnerships and limited liability partnerships, and getting lawyers thinking differently about the structural opportunities that ought to be available to them.”
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