Inside view from Down Under

In the spirit of embracing new technology, I spent half a day last week in front of a big screen. No, not the World Cup I hasten to add! The morning involved watching a live feed of Holyrood’s Justice Committee. Then in the afternoon, we moved through to another room for a video conference with Steve Mark, the head of the solicitors’ regulatory body for New South Wales in Australia.

On both occasions, the subject under discussion was alternative business structures. The parliamentary committee was considering amendments to the Legal Services (Scotland) Bill, agreeing changes promoted by the Society and others that will give more prominence to solicitors’ ethics and core values. Later, Steve Mark gave an insight into legal services reform in NSW – the only jurisdiction in the world with any length of experience of ABSs.

There was much to learn from the state’s Legal Services Commissioner. He explained that a model requiring at least 51% solicitor ownership (as opposed to the Society’s policy of 51% solicitors and other regulated professionals) was introduced in NSW in the 1980s but abolished a decade ago to remove all restrictions on permissible structures. Throughout the period, and despite further reform, there has been no ABS “big bang”. In a jurisdiction with more than twice as many solicitors as Scotland, to date only 30 firms have recognised opportunities in adopting new business structures, with two going as far as listing on the stock exchange. And, the solicitors’ profession still remains largely structured around the small firm. Big business – such as supermarket chains – has shown little interest in entering the marketplace.

In the early days, similar debates took place in New South Wales about the potential conflict between ethics and profit, but the NSW experience hasn’t borne that out. Steven’s own view is that a law firm couldn’t do profitable business if it abandoned ethics. He believes the fundamental conflict is between ethics and greed, which can exist in any type of structure.

During our video conference, Steve steered away from making predictions about the impact of ABS on our own jurisdiction, though he offered interesting observations about regulation in a reformed legal services market. The regulatory body, which he heads, has focused its attention on driving up solicitor professional standards. Their regulatory ethos is based on spotting risk, intervening early to put matters right rather than disciplining later when they have gone wrong. With reform fast approaching in Scotland, there are lessons to be learned from others who are already working with ABSs and have useful experience to share.