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Solicitors Regulation Authority grants first licence to local authority-owned ABS

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The Solicitors Regulation Authority has given the green light to the first alternative business structure to be majority owned by a local authority.

Under the ABS licence, the legal teams at Buckinghamshire County Council and Milton Keynes Fire Authority will be able to operate through a private limited company called Buckinghamshire Law Plus.

In a statement, the county council and the fire authority said the business was projected to make a £1.7m shared profit over its first five years.

“The potential client base will be expanded through the formation of the ABS which will remove the current restrictions on external trading and open up a wide market for its services,” they added.

“This market includes academies and higher educational establishments, housing associations, health services, ‘Blue Light’ services and mutual organisations.”

The ABS licence was granted yesterday (7 August) and will be effective from 24 November 2014.

Implementation is to take place in a series of tranches over the next six months, starting from September, subject to Cabinet Member agreement.

Anne Davies, Head of Legal at Buckinghamshire, said: “This is great news because it will mean that vast numbers of people and organisations who are not normally able to have access to expert legal advice will be able to come to this new company.

“The public and voluntary sector community will reap the benefit of having a trusted, and extremely competitively-priced, law firm at their disposal.”

Davies continued: “The overall benefits are potentially enormous. Buckinghamshire Law Plus will have access to experienced solicitors in all areas of the law, while the income generation will bring in much-needed revenue for the council in times of austerity. The council as a majority shareholder can put some of the profits into its reserves which means it will need less money from taxpayers to pay for essential services.”

She added: “The advice we are offering will be on all forms of law relevant to the public sector from solicitors nuanced to reflect the needs of the public sector.”

Davies said staff working for Buckinghamshire Law Plus would also benefit by experiencing a wider range of work and clients. “The focus on providing quality, affordable services will enable the new company to attract the best candidates as and when the recruitment of staff is required.”

Work will be done on changing the contracts of the existing 63 fee-earners so they are employees of both the council and Buckinghamshire Law Plus.

Graham Britten, the fire authority’s Director of Legal and Governance, said: “I enjoy working with lawyers who use the law creatively for the public sector to be innovative or to cut costs. Here, the legal teams will be applying those same principles to the delivery of a quality legal service itself.”

Peter Hardy, the county council’s Cabinet Member for Finance and Resources, said: “I am thrilled that Buckinghamshire has become the first authority to be granted this licence. It is a bold and exciting move which should really benefit everybody involved, as well as helping our taxpayers.”

On the entry on the SRA’s register of licensed bodies (ABS), Davies is the Head of Legal Practice while Mark Caprio is the Head of Finance and Administration. The practising addresses are given as County Hall and the fire authority’s brigade headquarters, both in Aylesbury.

Buckinghamshire Law + Limited will be licensed to undertake the following reserved legal activities: rights of audience; conduct of litigation; reserved instrument activities; probate activities; and administration of oaths.

The terms and conditions of the licence are set out as follows:

“The general conditions which apply to licensed bodies contained in Rule 8 of the SRA Authorisation Rules for Legal Services Bodies and Licensable Bodies as applicable.

“Any obligation which may from time to time be imposed on the firm or a manager, employee, or non-authorised interest-holder in the firm by or under the SRA's licensing rules or by or under the LSA, or any other enactment

“The firm may carry on exempt regulated activities under Part XX of the Financial Services and Markets Act 2000 provided that such activities arise out of or are complementary to the firm’s reserved legal activities or other legal activities.”

A number of local authority legal teams have submitted or plan to submit applications for an ABS licence.

A decision by the SRA on the application made by HB Public Law – the shared legal service between Harrow and Barnet Councils – is understood to be imminent.

Crispin Passmore, Executive Director for Policy at the SRA, said the concept of ABSs was introduced to liberalise the market and encourage innovation in the way that legal services are delivered.

“The creation of a public sector ABS is a great example of this innovation coming to the fore,” he argued. “It allows councils and other public service providers to pursue the shared services agenda and realise savings and efficiencies that are passed on to council tax payers.”

The Legal Services Board also welcomed the award of the licence. It said: “SRA’s decision to authorise Buckinghamshire Law + Limited….. as an alternative business structure (ABS) is a welcome development.

“We are pleased to see this positive step as it builds on the potential that ABS offer and opens the door to new possibilities in the legal services sector and the provision of legal services.

“We look forward to seeing what Buckinghamshire Law + Limited now does and the positive response of traditional legal practitioners to the significant development.”

The Legal Services Board also welcomed the award of the licence. It said: “SRA’s decision to authorise Buckinghamshire Law + Limited….. as an alternative business structure (ABS) is a welcome development.

“We are pleased to see this positive step as it builds on the potential that ABS offer and opens the door to new possibilities in the legal services sector and the provision of legal services.

“We look forward to seeing what Buckinghamshire Law + Limited now does and the positive response of traditional legal practitioners to the significant development.”