Brian Inkster: Why the Law Society cannot defer ABS in Scotland for two more years
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Brian Inkster
The latest announcement in the incredible delay into implementing alternative business structures is scrutinised by Brian Inkster.
The Law Society of Scotland has announced that they were deferring work on Licensed Legal Service Providers (LLSP), commonly referred to as Alternative Business Structures (ABS), for a further two years. In the announcement, published on the Law Society of Scotland website, they inform us that:
“The Legal Services (Scotland) Act 2010 provided the statutory basis for law firms to be owned by non-solicitors for the first time. The Law Society was authorised by the Scottish government in 2021 to be an approved regulator of these new entities, called licensed legal services providers (LLSPs). While significant preparatory work has been done, the system for authorising and regulating the new businesses is not yet up and running and new legislation now makes further changes to the LLSP regulatory framework.
“The Scottish Parliament passed the new Regulation of Legal Services (Scotland) Act in May 2025. The new legislation provides sweeping reforms to the way the existing solicitor profession is to be regulated. It also made changes to the make-up of LLSPs and how they are to be regulated.
“The Law Society’s Regulatory Committee, made up of solicitor and non-solicitor members, has therefore concluded that it would be appropriate to prioritise delivery of key parts of the new 2025 Act in the short term. This includes work on a whole new system of business level regulation of 1,200 existing law firms. The committee also agreed to focus on implementing the improvements to the complaints system, recognising that this had been a matter of particular focus for MSPs who had highlighted how the existing system was too slow for consumers in resolving disputes and issues of misconduct.
The committee therefore agreed to defer further work on LLSPs for the next two years. Noting that only limited interest had been expressed so far by firms in terms of becoming LLSPs, the committee agreed to return to the issue in 2027.”
So let us break this down:
“The Legal Services (Scotland) Act 2010 provided the statutory basis for law firms to be owned by non-solicitors for the first time.”
Indeed. That was in 2010. We are now in 2025. Fifteen years later and still no sign of ABS in Scotland. In 2016 (nine years ago) The Law Society Gazette, the publication of record to solicitors in England and Wales, referred to ABS in Scotland being rarer than Nessie.
“The Law Society was authorised by the Scottish government in 2021 to be an approved regulator.”
Indeed. That was in 2021. Four years ago. At the time, the Law Society of Scotland, under the headline “ABS era dawns as Society appointed approved regulator”, heralded this.
They said back then:
“The society is currently building the policies and processes that will support the approved regulatory scheme, which is due to launch in 2022.”
Therefore, in December 2021 they were expecting to launch in 2022.
Ken Dalling, then president of the Law Society of Scotland, said: “It has taken significant effort to get to this stage and we are working on the policies and processes needed to support the new regulatory framework. It will ensure licensed providers operate to high professional standards and that there are robust consumer protections in place, as there are for clients of solicitor firms.”
However, the reality was that ABS in Scotland was deferred again in 2022.
At a meeting at the Royal Faculty of Procurators in Glasgow on 13 October 2022 the then chief executive of the Law Society of Scotland, Diane McGiffen, indicated that the society had put a pause on the launch promised in December 2021.
This was apparently due to the announcement by the Scottish government on 6 September 2022 to introduce Regulation of Legal Services (Scotland) Bill in 2022/23.
The bill might affect ABS and the society wanted to know what the detail was.
I pointed out, then, how ridiculous this was. Provisions in an Act from 2010 were still not (at that point 12 years later) implemented by the Law Society of Scotland. Those provisions could and should simply have been implemented then as enacted.
It was not for the Law Society to pause the process to consider what effect possible future legislation may have on the existing unimplemented legislation. It was yet another example, in a long history of them, of the Law Society of Scotland dragging their heals when it comes to the introduction of ABS, which in Scotland remain as rare as Nessie.
However, in 2023 we were given a small glimmer of hope.
The Law Society of Scotland said on 10 August 2023:
“Changes to the Society’s Practice and Accounts Rules at the end of 2022, meant changes to the LP [Licensed Legal Services Providers] regulatory scheme rules were needed. The Society, as required by statute, re-submitted the scheme for approval by Scottish Ministers. It is working closely with the Scottish government to progress matters, following their consultation on the updated scheme, prior to launching later this year.”
So this was yet another “later this year”. That, as usual, came and went with promises yet again broken. ABS in Scotland was, in effect, deferred once more.
“New legislation now makes further changes to the LLSP regulatory framework.”
These changes are minor. If in 2023 the scheme was ready to launch, why is it not now? Even if some small tweaks might be needed to it following on from the Regulation of Legal Services (Scotland) Act 2025? Why can’t that simply be done now as a matter of priority and without any need to defer ABS in Scotland for a further two years?
“Appropriate to prioritise delivery of key parts of the new 2025 Act in the short term.”
Why would you prioritise “key parts” of the new 2025 Act (that still have to be brought into force by the Scottish ministers) when you have still not implemented key parts of the 2010 Act that has been in force for 15 years?
Is the reduction of 51 per cent to zero per cent lawyer ownership of law firms in Scotland not a “key part” of the 2025 Act? I have previously suggested that it is the most significant part of that legislation.
“Only limited interest had been expressed so far by firms in terms of becoming LLSPs.”
On what basis do the Law Society of Scotland make this claim? Have they asked their members? They haven’t asked me. Have they asked you?
Law firms cannot express an interest in terms of becoming an ABS (LLSP) until the application process is actually launched. There is no process in place to express an interest in advance of that.
This is a statement made from nowhere with no substance to back it up.
I know that it is simply not the case. I believe that the Law Society of Scotland are about to find out that they have misread the room. Is the will of the Scottish Parliament being flouted? In any event, even if there was any truth in the statement on limited interest in ABS, it is completely irrelevant.
The Scottish Parliament in 2010 (15 years ago) decided that ABS should be allowed in Scotland. This had a 51 per cent lawyer ownership requirement. Then in 2025, they decided that the 51 per cent rule should be eliminated.
In so doing Siobhian Brown MSP explained: “This simplifies the regulatory framework and potentially broadens the pool of eligible professionals which will encourage more diverse ownership structures within the legal profession and foster innovation and competition while maintaining high standards of professional conduct.”
A very recent (summer 2025) ‘UK Legal Services Market Report‘ by Strategy& (part of the PwC network) states that: “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 cannot be included within that statement. Scotland has been left behind now for 14 years and counting. The first ABS in England & Wales was licensed on 6 October 2011. Law firms in Scotland need a level playing field with England & Wales. The Scottish government recognise that and so should the Law Society of Scotland.
Over the weekend, Professor Stephen Mayson pointed out on LinkedIn:
“The powers granted by the Scottish Parliament that would allow ABSs are, like the equivalent powers south of the border, permissive. They will not – and should not – be relevant or appeal to all law firms. But it is not for the LSS to decide whether or not that choice should be available: Parliament has already said that it should. If even only one firm expressed an interest, it should now be possible for that firm to act on it.
“It appears that there is some form of capture that is driving regulation in a certain direction and away from the public interest as expressed by Parliament. It is clearly not capture by the membership, who have not been consulted and therefore have expressed no view. So where, exactly, is the origin and authority for this blocking/delaying tactic?
“Once again, the conflict between regulation and representation, when both reside in the same body, is writ large here. What a shame that Parliament did not heed the message that so many of us offered that, for the benefit of society, the pace of change and, indeed, a strong and thriving legal sector in the twenty-first century, this conflict must not be allowed to mandate inaction.”
The Law Society of Scotland have a duty to implement the will of the Scottish Parliament. Their failure to do so for over 15 years is a clear dereliction of their duties. They cannot continue to flout the will of Parliament for a further two years or more.
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