The change is part of the Regulation of Legal Services (Scotland) Act 2025, which brings in sweeping reforms to the way the legal profession is regulated.

The reforms include the introduction of entity regulation, which will mean that private practice law firms will be regulated as Authorised Legal Businesses (ALBs) and subject to their own professional standards and regulatory requirements. The new framework is designed to strengthen public confidence in legal services by applying regulatory standards directly to legal businesses as well as individual solicitors.

Given the scale of the work required to introduce the new regulatory regime, the Lord President, Lord Pentland, has granted a period of up to three years to prepare the ALB rules, from 1 July 2026.

It is expected that ALB rules, which will be developed by the Law Society’s independent Regulatory Committee, will be formally approved by the Lord President in June 2029, with ALB regulation coming into force in early 2030. Law firms will be supported with sufficient time to meet compliance with the new rules.

The ALB rules will cover the full lifecycle of a firm through the regulatory system, including authorisation requirements, fit and proper tests, financial and client protection requirements, ALB Practice Rules, inspections, complaints, and a new fee model.

David Gordon, convener of the Regulatory Committee, said: “Entity regulation represents one of the most substantial changes to the regulation of Scottish legal firms in the last 20 years.

“The three-year preparation period allows us the necessary time to develop an entirely new regulatory regime in a considered, effective and proportionate manner. It will require extensive work to prepare the new practice rules and fee structure for ALBs, in addition to updating existing rules where necessary and developing guidance for solicitors.

“We will work closely with the Lord President and consult with the Society’s members and key stakeholders to make sure we get it right for the profession and consumers of legal services, before the new rules come into force.

“Entity regulation is a significant step in ensuring that the way we regulate remains fit for purpose, as Scotland’s legal sector continues to evolve to meet the needs of clients today and in the future.”