Changing regulation and the future of the professional partnership: the case of the Legal Services Act, 2007 in England and Wales

Abstract

The UK Legal Services Act 2007 permits external financing and unlimited non-lawyer ownership of legal practices through the formation of Alternative Business Structures (ABSs). For many, the impact of this changed regulation on the 'professional partnership', as the dominant organizational form through which legal services are delivered, will be considerable. However, to date few studies have explored this empirically. This paper addresses this gap by examining organisational changes within ABSs to assess how far these firms have departed from the professional partnership model. Focusing upon the ABS population licensed by the Solicitors Regulation Authority between January 2012 and August 2015, the study findings show a continuum of organizational responses against four specified indicators: incorporation, multi-disciplinary practices, non-lawyer ownership, and external investment. These range from those that depart little from traditional practices to those that are more radical. We conclude that, whilst regulatory reform has yet to dislodge the dominance of the professional partnership, it has disturbed the status quo and increased the variety of 'economic units' within which legal services are delivered.

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“…Unhealthy (hereinafter known as Law No. five/1999), so long as the motion is accomplished entirely for the motive of enterprise development (Aulakh & Kirkpatrick, 2016). However the motion additionally has a bad effect this is circuitously felt through minority shareholders, employees, lenders and customers (DeAngelo & DeAngelo, 2000).…”

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“…However, the vast majority of these law-firmto-ABS moves have been very small firms whose clients are individuals rather than businesses (LSB 2017). While there have been one or two high-profile restructurings of larger incumbent law firms that focus on the corporate sector, such as DWF-which underwent an IPO in 2019 (DWF 2019, Armour and Sako 2020)-these have very much been the exception (Aulakh and Kirkpatrick 2016). Consistently with this, amongst our the practising lawyers who responded to our survey, only 12 worked in organizations that were ABSs, as opposed to 236 who worked for traditional law firms (Sako, .…”