The Law Society of Scotland has voiced confidence that the nation’s biggest cross-border firms will remain domiciled in Edinburgh, even though they are expected to enjoy less freedom to restructure and raise investment than their English counterparts after the introduction of alternative business structures (ABSs).

However, with Scottish parliament elections taking place in May, it remains unclear when ABSs will be allowed in Scotland, even though the legislation that paves the way for their introduction received royal assent in November. It is likely to depend on the priorities of the incoming Holyrood administration.

After much heated debate among the 10,500-strong Scottish solicitors’ profession, a compromise was reached last year and the Scots decided against following England and Wales in allowing 100% external ownership of licensed legal services providers. Instead, under the Legal Services (Scotland) Bill, Scottish firms will have to be at least 51% owned, managed and controlled by solicitors or members of other regulated professions, such as accountants.

Launching its first ‘election manifesto’ since devolution in 1999, the Society this week urged the Holyrood parties to accept the importance of the act ‘as an opportunity for Scottish firms’ and urged the Scottish government to press ahead with the implementing regulations.

Scotland’s justice ministry voiced fears last year that ABSs in England threaten the long-term sustainability of the Scottish legal profession unless Scottish firms are able to operate on a level playing field. The biggest firms, such as McGrigors, Dundas & Wilson and Maclay Murray & Spens, generate a substantial slice of their income from their London operations. This has raised fears they could consider switching jurisdictions.

However, the Society insisted the new regime ‘meets the needs’ of all Scottish firms, while conceding there may be ‘some issues’ with regard to interaction with firms in England and Wales. President Jamie Millar commented: ‘The large firms can live with that in terms of competing with English firms. It will not lead to a migration of firms south of the border.’

Among a raft of other proposals, the Society called for a review of civil litigation costs and funding, akin to the work done by Lord Jackson in England and Wales, and recommended that a qualification in law and the legal system be introduced into Scotland’s secondary schools.

The Society also wants consideration to be given to possible tax incentives for pro bono schemes, though it accepted this may have to be addressed on a UK-wide basis.