Legal News
Legal Services Act to allow lawyers and accountants to share practice ownership
04/10/2011
The implementation of the Legal Services Act 2007 on 6 October 2011 will allow legal firms to share ownership of their business with other professionals such as accountants.
This has revived the idea of multi-disciplinary practices (MDPs), as the threat of the “Tesco Law”, where supermarkets and banks will be able to offer legal services, prompts some high street law firms to look for new ways to diversify in order to compete.
Some commentators have already suggested that the Act could spell the end for lawyers-only and even accountants-only firms amid fears that consumers will choose firms able to offer a “one-stop shop” over more traditional single-discipline practices.
Professor Richard Susskind a legal expert at the University of Strathclyde has recently predicted that the big accountancy firms will re-enter the law in a big way and form MDPs, thought dead after the Enron scandal a decade ago.
The ICAEW is also monitoring the situation in the legal market with a view to the opportunities there may be for its members.
It has already been reported that the ICAEW intend to apply for reserved probate rights, while it is also eyeing up becoming a regulator of accountant-led alternative business structures (ABS).
However for MDPs to work, experts say some regulatory issues need to be overcome, as well as issues of professional rights and obligations such as client confidentiality and ethics.
Critics of the MDPs say that the two professions are too culturally different and that any “marriages” would soon turn to “divorces”.
Conversely, supporters of MDPs say these issues could easily be ironed out, with the two sets of ethical principles being reconciled in almost all client engagements. They argue the synergies between accountants and lawyers will be too compelling for some to ignore.
With the Supreme Court soon to rule on whether accountants giving tax law advice should be able to claim legal professional privilege, and the long-awaited memorandum of understanding between all the various regulators likely to be involved in ABSs, the issue of MDPs is sure to be debated more intensely in the coming weeks.
