Douglas Roberts

Nearly 2,500 businesses across the country are now employee owned, representing around 358,000 employee owners. Furthermore, over 30 law firms in England and Wales have adopted an EOT model through the ABS regime.

However, despite this growth, Scottish law firms remain unable to take advantage of the same opportunities.

The employee ownership sector is predominantly made up of small and medium sized businesses, making the model particularly relevant to Scotland’s SME-driven economy. Other Scottish professional services firms, including accountants and architects, have already embraced employee ownership, but Scottish law firms remain excluded due to restrictions on who may own a legal practice. While the Legal Services (Scotland) Act 2010 provides a statutory pathway for non-lawyer ownership, no regulatory system has been established to authorise such structures. In practice, this means that Scottish firms cannot currently sell to an EOT.

This gap is particularly concerning given the well recognised succession challenges within our profession. It is estimated that over 40 per cent of Scottish law firms are sole practitioners, many without a succession plan, prompting warnings of a potential “succession crisis” for the sector. Without access to models such as EOTs, many firms face limited and often unattractive options for transition, sale or even shutting down.

EOTs could provide a brilliant solution. They create viable and culturally sensitive succession pathways for smaller practices and support partners seeking a gradual exit, who may wish to remain involved as consultants, directors, or employees. This continuity can be particularly valuable for firms where junior lawyers or staff may not feel ready to assume ownership responsibilities. The model also enables all employees (rather than just solicitors) to share in profits, reinforcing the principle that every member of staff contributes to a law firm’s success.

There is clear appetite for progress. ABS Scotland, formally established in November 2025, reported interest from 20 firms even before its launch, stating that “the profession is ready, the market is ready”. Despite this, the Law Society of Scotland recently announced a two year pause on ABS development, citing a lack of interest. This stands in contrast to the experiences of practitioners: we have spoken to firms in Scottish actively seeking to sell to an EOT but who are unable to do so under the current regime.

Allowing employee ownership in Scottish legal practices would offer substantial benefits. Even with recent changes to the capital gains tax relief available on sales to EOTs, the model can still offer meaningful tax advantages. In a profession where fewer young solicitors aspire to partnership, opening ownership pathways to both legal and non-legal colleagues would help strengthen retention and succession planning.

EOTs and ABS structures will not suit every firm – but choice is crucial. Scottish solicitors should have the option to consider employee ownership as a legitimate, regulated route for securing the future of their practices. The time is right for the Law Society of Scotland to enable the profession to take advantage of the opportunities presented by employee ownership.

Douglas Roberts is a partner at TLT