Sunday 30 May 2010

Scottish solicitors reject Government's '100% Tesco Law' model

Scottish solicitors have backed a compromise motion on Alternative Business Structures (ABS) by 1,550 to 1404 votes at their Annual General Meeting; with the compromise motion securing the highest number of votes in support of any ABS motion at the Law Society of Scotland's AGM on Thursday 27 May 2010.  The compromise motion would permit ownership of law firms by non-legal professionals to a maximum of 25% of the business.

The motion was proposed by GLC's Mike Dailly, seconded by Govanhill Law Centre's Lorraine Barrie, and backed by the Scottish Law Agents Society among others. ABS has been dubbed 'Tesco Law' because it would enable supermarkets, banks, corporate investors, fund managers - and potentially even organised criminals - to own and control 100% of a law firm as an 'external investor': the Scottish Government's Legal Services (Scotland) Bill, as introduced, makes provision for a 100% external ownership model of ABS. 

The Council of the Law Society of Scotland's motion called for a reduced version of the Scottish Government's own ABS model, with no more than 49% of a firm being owned by external investors. The Council's motion was narrowly passed by 21 votes: 1486 to 1465.  At the meeting of Council following the AGM, GLC's Mike Dailly argued that the Society's policy on ABS now had no moral mandate standing the AGM, and that the will of the legal profession was clearly divided, and incapable of being said to be in favour of 49% external ownership.  Council accepted that there was now no clear consensus on ABS.   The Society's official AGM report is here (opens as PDF).

Mike's main speech proposing the compromise motion is here; for arguments explaining why 100% external ownership of Scottish law firms could result in significant consumer detriment and be contrary to the public interest in Scotland see here (2010) and also see here (2008).

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