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HB Public Law secures alternative business structure licence from SRA

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HB Public Law – the shared legal service between Harrow and Barnet Councils – has been granted an alternative business structure (ABS) licence by the Solicitors Regulation Authority.

It said the award of the licence would provide “greater freedom to trade in a manner similar to a private law firm” and “allow both organisations to provide a quality, affordable legal service whilst further developing their client bases in a way that would not otherwise be possible.”

The licence will be effective from 1 December. Jessica Farmer is named as Head of Legal Practice for the ABS, while Hugh Peart – HB Public Law’s Director and Harrow’s Director of Legal & Governance Services – is its Head of Finance and Administration.

HB Public Law was launched in September 2012 with the merger of Harrow and Barnet’s legal departments.

The 75-strong legal team is hosted in Harrow. The current intention is that employees will have dual contracts for the in-house team and the ABS, although further work is being done on this aspect of the arrangements.

Hugh Peart said: “I am delighted that the SRA has seen fit to licence our new venture, and that we are one of the first authorities to have achieved this.

“This will allow us to continue to provide excellent legal advice, even where council functions are outsourced to the private sector, for the benefit of service users and council tax payers.”

He added: “This is new territory for us all and we are very grateful for the assistance that we have received from our legal partner Bevan Brittan.”

HB Public Law was awarded its licence on 8 August, a day after Buckinghamshire Law Plus was given the green light by the SRA.

Buckinghamshire Law Plus is an ABS through which the legal teams at Buckinghamshire County Council and Milton Keynes Fire Authority will operate to provide services to a wider market. The business is expected to make a £1.7m shared profit over its first five years.

Jessica Farmer told Local Government Lawyer that a key driver in obtaining the ABS licence had been Barnet’s move to being a commissioning council.

HB Public Law would now be able to follow the legal work as council services are outsourced, she said. There were also other potential clients who might not have fallen within the ambit of the Local Government (Goods and Services) Act 1970, whilst there had also been concerns of falling foul of the rules on employed solicitors.

Farmer added that – as a result of the work carried out by HB Public Law, Buckinghamshire Law Plus and the SRA – there was now a clear route for local authority legal teams to obtain ABS licences.

However, council legal teams thinking of applying for such a licence should have a clear purpose and end result in mind, as the time and effort involved should not be underestimated.

The entry for HB Public Law Limited on the SRA’s register of ABS licences states that the vehicle is licensed to undertake the following reserved legal activities:

  • Rights of audience;
  • Conduct of litigation;
  • Reserved instrument activities;
  • Probate activities;
  • Administration of oaths.

The terms and conditions of the ABS licence are 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.”

Paul Philip, SRA chief executive 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 HB Public Law is a great example of this innovation coming to the fore. This should in turn create even more efficient services and savings for their council tax payers.”

Bevan Brittan partner Peter Steel advised Buckinghamshire Law Plus on the process of obtaining its ABS licence, while Iain Miller, the firm's head of regulation, acted for HB Public Law.

Miller said: "We are delighted to have been able to support these two innovative legal teams in their groundbreaking applications. Whilst the ABS process is becoming well established for private sector applicants, the issues and approach for public sector organisations was as yet untried.

"Our understanding of the complex regulatory framework and local government vires coupled with the vision and leadership from the councils meant that the SRA were provided with compelling business cases from both Buckinghamshire Law Plus and HB Public Law.”

Last week HB Public Law was shortlisted in two categories of the Law Society Excellence Awards for 2014: the Lexcel Award for Excellence in Practice Management and the Excellence in Business Development & Innovation category.

Philip Hoult