ABS in Scotland kicked into the long grass again?
ABS in Scotland being kicked into the long grass was a possibility raised yesterday. This was at an online event organised by the Law Society of Scotland: ‘Policy perspectives: Regulation of legal services reform’.
Regulation of Legal Services (Scotland) Act 2025
They looked at the Regulation of Legal Services (Scotland) Act 2025 as we enter into the implementation phase.
Law Society President, Patricia Thom; Convener of the Regulatory Committee, David Gordon; and Executive Director of External Relations, Kevin Lang, provided a session covering:
- Background to the new legislation
- Main provisions of the Act, including:
- New powers granted to the Law Society to regulate legal businesses
- Changes to the complaints investigation process
- Introduction of enhanced consumer protections, such as protection of the term lawyer
- Opportunities to deliver benefits for the legal profession and consumers
- The process of implementation
Alternative Business Structures (ABS)
Alternative Business Structures (ABS) were called that by the event panel. Not Licensed Legal Service Providers (LLSP) as the Act calls them. However, ABS has become the ‘Hoover’ word.
The 2025 Act reduces the requirement of 51% ownership by solicitors of an ABS to 0%. However, Scottish Ministers still require to bring that provision into force. That is also the case with the many other provisions of the Act. We were told that was unlikely to happen before 2026.
Legal Services (Scotland) Act 2010
The original 51% ownership provision was contained in the Legal Services (Scotland) Act 2010. However, it never saw the light of day. The Law Society of Scotland and the Scottish Government spent 15 years devising a scheme. That was put on hold in 2022, when it was announced that a Regulation of Legal Services Bill was to be introduced.
I have argued before that this was not a good reason to have ABS in Scotland kicked into the long grass.
When the amendment to 0% solicitor ownership was made I hoped that:
When the Regulation of Legal Services (Scotland) Bill is enacted the Law Society of Scotland will have run out of excuses and will start accepting applications for licensed legal services providers without further ado. At least now they do not have to consider the question of majority ownership when so doing. I trust that majority ownership reform will no longer be ignored but will be taken seriously by the Law Society of Scotland.
ABS in Scotland could be kicked into the long grass
However, we discovered at the event yesterday that this might not in fact be the case. It looks as though ABS in Scotland could be kicked into the long grass yet again.
A delegate, in the chat, asked:
In looking at the opening up of ABS – when will this be implemented to allow broader external investment in legal firms?
Kevin Lang, Executive Director of External Relations at the Law Society of Scotland, replied:
We are still working our way through the (substantial) changes made to the ABS requirements which will mean we will need to revise our regulatory scheme which will then need to go back to the ScotGov and Lord President for approval. We hope to say more on this soon.
Really?! There are only five sections in the 2025 Act (sections 84 to 88) dealing with ABS. These, together, could not be classed as “substantial” compared to what was contained in the 2010 Act. Significant, perhaps, is the reduction from 51% solicitor ownership to 0%. However, the possibility of such percentage changes were foreseen in the 2010 Act. That Act allowed for this by order of the Scottish Ministers. Thus, the existing regulatory scheme surely covers the position already if it even has to. If not, why not?
Get on with it and don’t kick ABS in Scotland into the long grass!
The 2025 Act was not necessary to achieve the percentage change. That change might not happen until 2026 at the earliest. I trust that, in the meantime, the Law Society of Scotland, Scottish Government and the Lord President can work together to revise the regulatory scheme, if such revision is actually required. That should be done before sections 84 to 88 of the 2025 Act are brought into force. This will avoid further delays and reduce accusations of them kicking ABS in Scotland into the long grass yet again.
Update – 6 September 2025
The Law Society of Scotland confirmed yesterday (5 September 2025) that they were putting ABS in Scotland into the deep freezer for at least another two years. That was a much longer kick into the long grass than could ever have been expected! I comment on this latest turn of events, in the 15 year long saga of ABS in Scotland, here: Law Society deep freeze ABS in Scotland for at least two more years!
Reactions to ABS in Scotland kicked into the long grass again?
On LinkedIn the following comments have been made:-
Michael Burne (Founder of Pioneer 7R. Curious about what makes us explore. Day job is changing the way the legal profession works one step at a time. Like asking why and taking photos too.):
At the least you’re taking a scythe to the long grass so all can see where the can has been kicked Brian.
It’s a shame that modernising and bringing fresh capital and ideas into the legal profession in Scotland still hasn’t happened. It’s already 15 years since it happened in England and Wales.
Let’s hope the regulators in Scotland have used the time wisely to see what hasn’t worked south of the border and what can be improved – there’s plenty btw.
Paul Ryan (Founder of Focis Client portal to help you connect your automated processes to your clients):
Has it made a difference to clients of legal services in England and Wales? That is a genuine question not social media sniping I’m genuinely curious!
Me:
Michael Burne, I was thinking I might need to get a Combine Harvester 😉
15 years since it happened in England & Wales equates to the time spent by the Law Society of Scotland, Scottish Government and Lord President in coming up with a Scheme and now we are told that needs to be revised! Imagine what the Law Society would say if a solicitor regulated by them took that time to draft a document 🤔
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Stephen Mayson (Lead, Independent Review of Legal Services Regulation (England & Wales); professor of law; independent non-executive chair, director and advisor; Bencher, Lincoln’s Inn):
Everyone involved has had years to get their heads around the issues and to formulate appropriate regulation to address the risks. Seems like we’re still seeing a risk-aversion mindset rather than targeted and proportionate risk management. As you say, Brian, imagine a solicitor’s client waiting this long for action on something that’s commercially time-sensitive in its implementation. I still think the combination of regulation and representation is fundamentally flawed, and now we seem to have neither function being fully discharged in the public interest.
Me:
Hear, hear.
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Sue Bence (COO | Professional Services Transformation | Buy & Build Specialist | M&A | Integration | Value Creation | Listed & PE-Backed Expertise | Solicitor):
Goodness me, sounds like all talk and still no progress. We are relying on you Brian Inkster to wake us up if the Scottish ABS ball ever emerges from the grass.
Me:
I’ll be in the grass trying to find it and throw it back out!
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Crispin Passmore (Consultant to legal market):
It’s what monopolies do. I can’t think of any monopoly that gave it up willingly. It needs external pressure and decision making. That can be Government. But it can also be capital. We’ve seen that in a number of professions in the US in particular. And now it’s happening in US legal market where I mainly work now. We use various structures to bring capital into law without breaching these sorts of bans. law Society Scotland won’t stop this so they should get on with regulating it.
Me:
Hear, hear.
Matthew Monson, Esq. (Keynote Speaker | Fraud Fighter | Litigation Integrity Advocate | Exposing Mass Tort Abuse | Legal Ethics Voice | Insurance Defense Strategist):
Crispin Passmore, the law practice is not a monopoly. There is no dominant market player. Yes, you have to pass the bar and satisfy requirements. This is no different than many other professions.
Notably, that distinction does not belong to you. Yet you hold yourself out as some kind of revelatory guru.
Scrutiny of your approach is only just beginning. Maybe you and your hedge fund henchman will win and you too will be able to act like a lawyer.
But we all know you aren’t one.
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Rob Aberdein (Building Scotland’s most exciting Solicitor Estate Agent):
Sounds like a working group of progressive lawyers may be needed in order to engage with the LSS. There is a huge appetite from a large number of forward looking firms in external investment to drive growth.
Dan McFarlane (Associate Solicitor at Kellas):
100% Rob. It staggers me that our own regulatory body, there to support firms and help them, is not prioritising something like this to allow firms to flourish. I just feel they are constantly looking at ways to ensure they remain in full control, instead of actually having constructive dialogue with the industry.
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Nicholas Scullion (Building powerful teams at Scullion LAW and Deban Derecho):
Well written Brian…
But don’t hold your breath for this change.. 🧘
I fully expect to have retired before it happens…. ⛳️
These guys make snail racing look like F1. 🐌
Me:
I am hoping you might be older than me, but don’t think that is the case!
Nicholas Scullion:
ha ha, perhaps, I’m nearly 50! 👴
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Dan McFarlane (Associate Solicitor at Kellas):
This process is beyond painful! The LSS need to pull their finger out with this. More dithering and delay is just simply halting the massive potential growth for firms.
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Frank Maher (Partner at Keystone Law (Solicitors). Keeping lawyers out of trouble.):
They are navigating round similar restrictions in other jurisdictions…
Time for a rethink on the approach to this.
