What's next for ABS? Behind the three little letters stirring Scotland’s legal sector

Peter Ranscombe asks what’s next for alternative business structures in Scotland and how long it could be before non-lawyers can invest in law firms.

Who would think three wee letters – A, B and S – could cause such a stooshie? Discussions over alternative business structures (ABS) stretch back into the previous millennium, with various proposals to allow non-lawyers to own shares in Scottish law firms.

The 2010 Legal Services (Scotland) Act introduced the concept of licensed legal services providers (LLSPs) – entities in which non-lawyers could own shares – with the Scottish Government authorising the Law Society of Scotland to regulate LLSPs in 2021.

The 2025 Regulation of Legal Services (Scotland) Act (RLS) reduced the stake needed to be held by lawyers in LLSPs from 51% to zero. In September, the Society’s regulatory committee announced it would return to the subject of ABS in 2027/28.

Yet a series of website articles, blog posts and social media comments since then has kept those three letters firmly in the spotlight. So, what are the next steps for the introduction of ABS? Are there likely to still be any restrictions on who can own a law firm and, if so, what might they be? And what is the timescale for introducing ABS in Scotland?

Huge amount of work to implement other changes

“These are good questions and give some sense of the complexity of this process and of why alternative business structures are not a tap that can be turned on overnight,” says Rachel Wood, the Law Society of Scotland’s executive director of regulation.

“The RLS has made some significant changes in relation to ABS, including removing the requirement for majority ownership by solicitors and other qualified professionals. We will need to revise our regulatory scheme for ABS as a result, a process that will involve working with Scottish ministers, the Competition and Markets Authority, and the Lord President for consideration and approval.”

Rachel adds: “Our regulatory committee decided recently to defer work on ABS for two years until our 2027/28 operating year, rightfully prioritising work implementing other changes from the RLS. We have a huge amount of work ahead of us implementing these changes, including in relation to conduct complaints and the introduction of entity regulation for our existing regulated population.

“We understand the disappointment that’s been voiced by some parties, who should be reassured by the fact that this is a purely operational decision. The Society remains committed to and supportive of bringing ABS to Scotland's legal sector.”

Faith diminished but appetite remains

Jacqueline Law, managing partner at law firm Aberdein Considine, says: “In a published article on 1 September 1999 on multi-disciplinary partnerships, John Elliot concluded ‘the Society must lead’. We are 26 years on from that call to action and the Society has decided, without consultation with the profession, to lead on other matters arising out of the RLS but not on ABS, citing prioritisation and that a limited number of firms have expressed an interest in ABS.

“How has the latter conclusion been reached by the Law Society? There has been no formal consultation with the profession, nor any formal process or mechanism to register interest in ABS. Whilst the Society must prioritise and use its resources accordingly, after nearly 17 years of this being ‘in planning’ one would think that this should internally be a fairly evolved matter. Is it perhaps that after 20 years of tracking and waiting for guidance the profession still has no route to influence progress and is cynical on ability to implement?”

Jacqueline adds: “Aberdein Considine had ABS on its monthly partner meeting agenda for a decade before we removed it following a standing report of ‘no progress’. Whilst our faith has diminished our appetite remains. With our additional service lines to core legal services including estate agency, mortgage and protection – and, prior to June 2025, wealth management – ABS would potentially allow us to bring key directors in those service lines fully into the business.

“We are already behind the curve of our English and Welsh counterparts on this matter. We are way beyond deliberating the pros and cons of ABS. Parliament has legislated that we should have the choice and the Society must find the resource to implement without further delays.”

Degree of embarrassment at the delay

Philip Rodney, former chair of Burness Paull, one of Scotland’s biggest law firms, says: “Given that LLSPs were allowed under legislation introduced in Scotland in 2010, and that the first ABS was licensed in England in 2012, I don’t think it is right that their introduction should be pushed out another two years. Whether the legislation should have been passed in Scotland in the first place is a separate question. That ship has sailed. The decision having been made, it is difficult to fathom how and why it will have taken 17 years to implement the provisions.”

During his time on the board, Philip doesn’t think Burness Paull or other large firms would have benefited from ABS to attract external investment. “It may be an old-fashioned view, but I believe what makes law a profession is that lawyers serve their clients and no one else,” he explains. “Add the complication of having to satisfy external investors also, and that purity is compromised.

“The focus subtly shifts to producing returns for the external investors rather than delivering the optimum service. I don’t know if there has been any research on the topic, but I would be interested to see whether there is a difference in client satisfaction rates between firms owned and run by their partners and those with external investors.”

Reflecting on ABS more broadly, he adds: “In honesty, the topic rarely comes up in conversation with former colleagues in the bigger firms. So, among them, I don’t pick up much frustration. However, I suspect that this may differ in other strata of the profession. I do, however, feel a degree of embarrassment at the delay given how long it is since the legislation was enabled south of the border.”