HOW COULD YOU BENEFIT FROM THE LEGAL SERVICES ACT? (20/04/11)
In a difficult economy, arguably the introduction of the Legal Services Act will provide some businesses with an opportunity to diversify and explore different business and finance models, while individuals and client companies should have the chance to save money by obtaining multiple services from one provider.
What is the Legal Services Act?
The Legal Services Act introduces the following key measures:
• A single supervisory body, the Legal Services Board, which will oversee all approved regulators such as the Law Society.
• Introduction of a new Legal Ombudsman service to handle consumer complaints.
• Creation of a new business structure, known as an ‘Alternative Business Structure’ (ABSs), which will allow lawyers to form partnerships with non-lawyers, and accept outside investment or operate under external ownership.
How will the Legal Services Act affect me?
The introduction of ABSs means that solicitors and barristers will be able to share management and control with non-lawyers, such as accountants and estate agents.
It would be possible, therefore, to go to your accountants and not only obtain tax and accounting advice, but also have your Will drafted, or a shareholder’s agreement prepared at the same time that a new company is incorporated on your behalf.
The obvious benefit of this is that only one set of instructions needs to be given, saving you time and money and preventing duplication of work done. Additionally, your accountant may already have the necessary information to allow such documents to be drafted.
Of equal importance is the increase in competition; if a wider range of businesses are able to offer legal services, the cost to the client will naturally be reduced as firms will be forced to reduce their rates to compete.
Will the quality of legal services remain the same?
The Legal Services Board will oversee the whole of the regulatory framework in England and Wales, but it will be the responsibility of the approved regulators, such as the Law Society, to ensure that legal service providers offer a high level of service on a day-to-day basis. Businesses wishing to apply to become an ABS must be approved by a regulator; though their licences can be revoked if they breach regulation.
What if I have a complaint about the service I have received?
The Legal Ombudsman facility is a free service for consumers to complain about the service they have received. The Ombudsman looks at complaints in a fair, impartial and independent way. Under the Act, the upper limit for compensation has been raised to £30,000.
The Law Society has this month received approval by the Legal Services Board to become an approved regulator. The hope is that licensing of ABSs will be in place by 6th October this year, with many applications expected.