The Bar Standards Board (BSB) has launched the third in a series of consultations seeking to address the implications of the Legal Services Act 2007. The results of the consultation, Regulating Entities will determine whether the BSB should become an entity-based regulator of new structures, such as alternative business structures, barrister-only entities and legal disciplinary practices. The consultation follows a YouGov survey conducted in early 2010 which indicated only 35% of barristers would be likely or very likely to join a new structure within the next five years if the BSB was to regulate it.
However, Nicholas Green QC, chairman of the Bar Council, argues that this figure is a substantial understatement of the desire for change. "There was much confusion in March and April as to what restructuring would involve. We have designed models to provide independence and to give greater flexibility and commercial freedom to the Bar while maintaining the chambers structure. Barristers now have a better understanding of the business models, and are embracing them. If the survey was carried out now, we would find that perhaps as many as 80% are in favour of change."
LPA Legal Recruitment disagrees, suggesting that the decision to join a new structure will be based primarily on practice area. "Barristers involved in publicly funded work, predominately family and crime, are more likely to be interested in joining a new structure regulated by the BSB than those working in the commercial sector, because they are facing enormous cuts to their funding. For those at the top end of the Bar, there is no commercial advantage to actively pursuing inclusion within a multidisciplinary practice. Lawyers who joined the Bar did so in order to be independent practitioners. The majority are still keen to maintain that."
The consultation also contemplates the future of the Bar's cab-rank rule, which obliges barristers to accept any work they are qualified to do, and asks whether they should continue to be prevented from holding clients' money and providing litigation service. Both LPA Legal Recruitment and Green agree that as the cornerstone of Bar practice, the cab-rank rule will remain, but on the issue of holding clients' money, they disagree.
LPA Legal Recruitment argues that there is little commercial advantage for barristers to hold clients' money. "Stringent regulations, which in turn would increase cost base, would be required before such a thing could happen. It is not something we are aware sets are actively pursuing." Green, however, does foresee changes to this restriction. "There is a risk [in barristers holding clients' money] but it is a very low risk. The costs involved in setting up a regulatory regime to govern it would also be relatively low. We are looking at creative means to permit money-holding, for example custodian relationships with banks."
The BSB is seeking comments by 23 December 2010.
LPA Legal Recruitment was quoted in Law Business Review (November 2010)