External ownership: can we really regulate?

I read the almost hourly updates to the ABS and regulation/representation debate with a huge amount of interest. Rather than commenting individually on each of the first three articles, can I give my general view here?

I may say that I am delighted that there is a debate going on at all. The majority of us simply do not have time to look at lengthy bills and consider our detailed response. We look to the Society for that. I was extremely concerned about much of what was in the bill when it was published, but I confess that I had not the energy to make much of a fuss about it. I imagine that I am not alone in that. Whatever the outcome, we now appear to have a rather more engaged profession than usual.

It is unfortunate that the debate is now starting to become one of Progressive versus Luddite. Do I accept that solicitors are not masters of their own destiny? Yes. Do I agree that the Law Society of Scotland has to do its best to work with Government in negotiating these issues? Of course. Do I feel that we have to slavishly follow the English and open up ownership of legal services to all comers? Not at all.

I, along with many others, voted in favour of the Society’s policy at the AGM in 2008. That did not mean that I had no reservations about the way the policy would develop. We were assured that if regulation of ABSs became unworkable then the particular type of ABS would not be allowed. My problem at this stage is that I have yet to see the detail of exactly how these structures would be regulated. Carts and horses come to mind.

Now I have no difficulty at all, in principle, with solicitors going into practice with other professionals as partners, subject to solicitors remaining in the majority in the partnership. My difficulty with external ownership is I simply cannot see how this can be regulated. The Society proposes that there should be a “fit and proper” test. Do we really believe that this will weed out those people who should not own a firm? It is also proposed that non-solicitor owners of firms should contribute to and be members of the Guarantee Fund. Am I alone in saying that, under no circumstances, do I wish to find myself jointly and severally liable with an indefinite number of (broadly) unregulated people? Many people who are much cleverer than I may know exactly how this regulation could work: but if so, could someone please tell us?

It is encouraging indeed that Fergus Ewing has taken on board the fairly vocal comments and fundamental concerns about section 92 of the Legal Services Bill. Is it not possible that the Government would take on board other issues also? I am a great believer in compromise and it does seem to me that there must be a middle route possible. To use Austin Lafferty’s analogy, the Society may indeed be tossed by gales in its little boat, but that is no reason to put up every scrap of sail that we have and sail straight into the maelstrom. Reef the sails and put out the storm anchor so that we can get through the storm intact.

We have faced challenges in the past and have met them head on. We may well have been improved by some of the challenges that were seen as the death knell to our profession. This is different. The risks are high and if we get it wrong the consequences may be disastrous.

And by the way – surely no one really believes that allowing external ownership is about helping consumers!