Chapter 7: Legal Services Act 2007 and the promotion of regulatory competition
As discussed in Chapter 5, the United Kingdom has been seen as one of the EU member states with a more liberal approach to regulating markets for legal services. The implementation of the provisions of the Legal Services Act 2007 (LSA 2007), permitting the establishment of so-called ‘alternative business structures’ (ABSs) owned by non-lawyers, makes England and Wales the most liberalized jurisdiction within the United Kingdom1 concerning the forms of business entity through which legal services can be provided. An ABS under LSA 2007 may be owned by non-lawyers, whereas under the provisions of Legal Services (Scotland) Act 2010 (LSSA 2010) only 49 per cent of an ABS may be owned by non-lawyers. A second feature of LSA 2007 and LSSA 2010 is that they enshrine the promotion of competition in the provision of legal services as a regulatory objective. Thus regulators in both jurisdictions are under an obligation to promote competition. It will be argued below that particularly in the case of LSA 2007 this includes regulatory competition. Indeed, the regulatory structure introduced by that Act is designed primarily to promote regulatory competition. This chapter discusses the nature of the changes in the way in which legal services will be provided in England and Wales as a consequence of both the emergence of ABS firms and the promotion of regulatory competition. The next chapter examines the implications of supplying legal services through such entities for the nature of the legal services being provided.
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