Tesco law - showing off their sweet ABS
by Brad Askew, 9 January 2012
Alternative Business Structures (ABS) or ‘Tesco Law’ as it has been dubbed (despite Tesco appearing not to enter the fray –yet), relates to huge changes in legal services in the UK – and it will undoubtedly lead to the proliferation of lawyer availability in places where they were previously not allowed to practice.
As a major part of the Legal Services Act which came into effect in October, Tesco Law heralds a new era in the ways in which law firms can be acquired, with traditional ownership restrictions being loosened to allow non-lawyers to invest and become the owners of their own legal businesses.
This means that high street services – such as banks, supermarkets and other types of companies will be able to provide a lawyer along with their regular, established services.
As of the 3rd of January 2012, the Services Regulation Authority (SRA) was cleared to become the ABS licensing regulator and began accepting applications. Tasked with assessing applications from non-lawyers and regulating their legal conduct should they be successful, Andy Townsend (Chief Executive of SRA) asserted that: “...the public can have confidence that ABS providing reserved legal activities will be regulated according to the same rigorous professional standards as traditional law firms”.
This is good news for consumers, as tight regulation is certainly required to dispel the predictions by critics (such as existing law firms) that the loosening of ownership restrictions will herald a drop in the standards of legal services.
The full consequences of the changes and what happens next is anyone’s guess, although it does appear that the British legal sphere is going to be shaken-up. These alterations are definitely going to affect existing law firms - which will surely have to lower their fees and plan out new strategies to deal with the added competition from the public having access to lawyers at the local Co-op or bank.
While there haven’t been a massive amount of applications (and it could take quite a few months to have one accepted), it already appears that some non-legal companies are going to enter the arena swinging.
For instance, Law on the Web’s parent company Everything Legal was recently acquired by major insurance company DAS, part of a move to deliver stronger legal services. Others, such as the Co-operative group, have also been watching closely with a view to gaining a foothold in the world of law.
The changes are unlikely to be felt for some time – businesses applying for ABS licenses could find themselves waiting for up to nine months – but it will be interesting to see the ripples in the pond of law that the ABS pebble is set to create.