Brian Inkster

That ability to sell shares in law firms to non-solicitors was first introduced by the Legal Services (Scotland) Act 2010. This was through the formation of Licensed Legal Service Providers (LLSP) in Scotland. These are commonly referred to as Alternative Business Structures (ABS), being the name given to them in England & Wales. In Scotland, under the 2010 Act, there was a 51 per cent solicitor ownership requirement.

The seminar had talks by Elaine Crawford, of the Law Society of Scotland, and solicitor, Michael Sheridan. Mr Sheridan saw the 2025 Act as “authorisation of the sale of solicitors’ practices to investment companies”. He asked why the percentage ownership was reduced from 51 per cent to 10 per cent (in the Bill) to zero per cent (the Act)?

I answered that this was because it should never have been 51 per cent in the first instance. It should always have been zero per cent for parity with England & Wales. There, that system has been operating since the first ABS was formed in 2012.

Frustration over delays

The ABS Scotland Group formally launched on 24 November 2025. The group was born out of frustration with the Law Society of Scotland’s delays in implementing ABS in Scotland. By 2025, there had already been a 15-year delay in implementation following on from the Legal Services (Scotland) Act 2010. There was hope that the Regulation of Legal Services (Scotland) Act 2025 would speed the process up. However, instead, the Law Society announced a freeze of at least another two years on doing anything on ABS. That was confirmed by Elaine Crawford yesterday. She said this was necessary to deal with the task of entity regulation which was introduced by the 2025 Act. The Law Society of Scotland expect to have three years to deal with that from summer 2026.

There was no recognition that more than 15 years have passed already without them dealing with ABS in Scotland! The main objective of the ABS Scotland Group is to encourage and facilitate the introduction of ABS to Scotland. Mr Sheridan appears to think that ABS in Scotland is just about the “sale of solicitors’ practices to investment companies”. There are a lot more benefits to ABS than that one area, which, unlike me, Mr Sheridan does not see as a benefit.

Six benefits of ABS in Scotland

The ABS Scotland Group lists six benefits of ABS in Scotland:

1. Recognition for non-lawyer employees

At the moment law firms, in Scotland, cannot recognise key non-lawyer employees by giving them equity in their businesses. The first ABS licensed by the Solicitors Regulation Authority (SRA) in England & Wales, in 2012, was John Welch & Stammers. They were, then, a two-partner law firm, who wanted their practice manager, Bernadette Summers, an accountant, to become a partner.

Ms Summers told ‘Legal Futures’, in 2022, that: “After we became an ABS and I went to conferences about them, 90 per cent of people were doing it so financial people could become partners – not for any other reason.” Research carried out by the SRA in England & Wales, in 2014, stated: “Our research also shows that firms viewed the adoption of an ABS model as an opportunity to strengthen their management teams through the introduction of non-legal managers.”

Indeed, one of the most widely recognised benefits of ABS is the injection of professional management expertise into law firms. The Legal Services Board’s research demonstrates that non-lawyers bring essential skills, including “strategic leadership, human resources, finance, IT and marketing” that are “important in helping to make a law firm successful”.

This benefit was recognised by Jacqueline Law, managing partner of Aberdein Considine, in a recent JLSS article, which quoted her as saying: “With our additional service lines to core legal services including estate agency, mortgage and protection – and, prior to June 2025, wealth management – ABS would potentially allow us to bring key directors in those service lines fully into the business.”

2. Succession

ABS gives law firms succession options that would otherwise not be open to them. The third ABS licensed by the SRA in England & Wales, in 2012, was a sole practitioner, Michael Pope, who wanted his wife, Alison, to become a partner.

It is not unusual in Scotland that on the death of a sole practitioner the Law Society of Scotland intervenes, appointing a judicial factor to move the business of the law firm on elsewhere. The associated costs, and often lack of any sale price, leaving nothing for the beneficiaries of the deceased’s estate.

In slightly larger law firms, it is increasingly the case that solicitors are not always interested in partnership. A study (summer 2025) by the Law Society of Scotland of the country’s smaller law firms (defined as those with 39 or fewer solicitors), found that only 29 per cent of non-partner respondents have aspirations to become a partner. Nearly 50 per cent say they have no aspirations for that kind of career progression, driven by maintaining a better work-life balance and protecting themselves from additional stress.

ABS provide law firm partners with other options given the different career ambitions and expectations of solicitors today, compared with those who have gone before them. Firms can attract buyers or partners from outside the legal sector, expanding the pool of potential successors beyond traditional partners.

ABS can also facilitate the transition from partnerships to employee-owned law firms. The research carried out by the SRA in England & Wales, in 2014, stated: “ABS business models also appear to be used to improve firms’ succession planning. This may bring about further benefits as it helps to address risks to consumers, such as disorderly closure and abandonment, that occur when law firms have poor exit or succession plans.”

3. Access to investment for growth and innovation

The research carried out by the SRA in England & Wales, in 2014, showed that ABS investment was “a key motivator for many ABSs”. Typically, this was used in three distinct ways:

• Technology
• Marketing
• Delivering Legal Services in New Ways

The Legal Services Board’s research shows that solicitors practising in newly created ABS firms “have higher levels of innovative activity of all types than other Solicitors” and are “more likely to introduce new legal services, with potential benefits for service users”.

Christina Blacklaws (former president of the Law Society of England & Wales and current chair of the Advisory Panel of LawtechUK) on 3 September 2025 stated in an article, in The Scotsman, that Scottish law firms could “lead the way in creating truly inclusive legal innovation, where technology strengthens the profession”. What she did not appreciate was that, with the absence of ABS in Scotland, this was but just a pipe dream. Our English & Welsh cousins are at a much greater advantage to lead that way.

A recent (summer 2025) ‘UK Legal Services Market Report‘, by strategy& (part of the PwC network), states: “A decade after the liberalisation of the UK legal market, we are now witnessing a genuine diversity of business models and strategies reshaping the sector.”

That, of course, should have read “English & Welsh” legal market as Scotland could not possibly be included within that statement. Perhaps Mr Sheridan has not fully considered the benefits of external investment as borne out south of the border.

4. Diversity

We have an increasing need to have a legal sector which is more diverse and inclusive. One which is able to attract, advance and retain talent from many different backgrounds and disciplines in an effort to compete on the global stage. It is well established that the legal profession is dominated by those from privileged and conventional backgrounds, which no longer meets the demographics of those entering the professions nor those seeking our services. By introducing ABS, we are increasing the opportunity of more diverse talent entering and remaining in the sector providing us with a more level playing field in terms of competing with others on the global stage. It is also widely researched and accepted that diverse businesses outperform their less diverse counter parts in all KPIs.

Recent trends should also raise concerns about the threat to talent retention from out with the profession, with other sectors increasingly recognising the attraction of those with a law degree, whilst legal talent (particularly those from Gen Y and Z) find alternative business structures better accommodate their needs, most notably in providing a better work-life balance. It is also no coincidence that in house legal teams are growing and attracting talent at a faster pace leaving national firms with outdated businesses structures competing from an ever-decreasing pool of talent.

5. Consumer benefits

As part of the call for evidence during the passage of the Regulation of Legal Services (Scotland) Bill, in 2023, the following views were expressed on the proposal to reduce the 51 per cent lawyer ownership threshold:

Consumer Scotland: “These changes should increase the choice of providers available to consumers, enhance the range of services which not-for-profit advice services are able to provide and more generally improve levels of competition and innovation in the legal services market.”

SLCC Consumer Panel: “Choice is a key aspect of the Consumer Principles, so we welcome any move to create greater choice in the legal services market and to remove any barriers to new models that could increase choice or access for consumers.”

Competition and Markets Authority: “Benefits should allow for the introduction of ABSs with genuinely novel and innovative business models that are able to compete with traditional law firms. This competition should mean that consumers will ultimately have greater choice and be able to benefit from innovative, higher quality services provided at lower cost.”

6. Parity with England & Wales

ABS in Scotland will give Scotland parity with England & Wales. With several English ABS already operating in Scotland, Scottish law firms are at a competitive disadvantage. This is inequitable.

As Margaret Taylor, writing in ‘The Lawyer’ just last week, said about me and my views on this: “Inkster has long argued that allowing ABSs in one part of the UK but not in another is unfair and liable to lead to perverse outcomes; the fact that PE-backed English firms can lawfully expand into Scotland while Scottish firms have no recourse to the same kind of external funds indicates that he is right.”

ABS Scotland Group

The ABS Scotland Group currently has 29 members , including Harper Macleod, MacDonald Henderson and Jones Whyte, as well as several independent and high street firms from Kirkwall to Kirkcudbright. The group is now actively calling on more legal professionals and firms, large or small, to join the campaign and help drive meaningful reform.

To find out more about the ABS Scotland Group and to support its mission, by joining, visit: www.absscotland.org.