18 July 2018 at 10:12 BST

UK legal executives to get ABS licences

Alternative business structure licences to be granted to legal executives, opening up regulatory competition, more diverse opportunities.

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Alternative business structure licences have been extended to legal executives. The regulator for legal executives has joined the cohort of groups with power to grant licences. Lord chancellor David Gauke has decided to make an order designating the Chartered Institute of Legal Executives (CILEx) as a licensing authority for reserved legal activities.

Increased regulatory competition

The order extends to granting entities the exercise of a right of audience, the conduct of litigation, reserved instrument activities, probate activities, and the administration of oaths. This effectively means CILEx members can set up their own businesses with non-lawyer ownership and investment. The move increases the regulatory competition for other bodies, such as the Solicitors Regulation Authority. It may also mean legal executives employed by solicitors may choose to operate independently under their own regulator. The Legal Services Board, the oversight regulator, recommended last month that the lord chancellor make the order to add CILEx as a licensing authority. The order will now be laid in parliament. The application was made last September, and CILEx said its research showed a third of members were positive about operating outside of a law firm and, of those, almost half were positive about operating as an ABS.

Diversity of opportunity

Members were particularly interested in bringing non-lawyer specialists, such as finance and marketing experts, into the ownership of their business so that they could conduct reserved legal work. The CILEx application stated, ‘we believe that greater diversity of opportunity within the legal market can assist in developing consumer choice and finding better ways to deliver better services.’ In a joint statement, CILEx president Millie Grant and CILEx Regulation chair Sam Younger said: ‘We see this application as integral to the opportunities developed for CILEx members in recent years. We believe that by widening the choice of legal providers for consumers, as well as the choice of regulator for legal professionals seeking to run their own firm, we are helping to encourage competition within the legal services market.’

 
   
 
 
 

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