Solicitors, barristers, legal executives, licensed conveyancers and other types of lawyer will be allowed to form partnerships with each other ahead of greater liberalisation of law firm business structures, the Lord Chancellor announced last week.



Speaking at the second reading of the Legal Services Bill in the House of Lords, Lord Falconer said legal disciplinary partnerships (LDPs) - with no non-lawyer managers or owners - will not be alternative business structures (ABSs) envisaged by the legislation and so need not wait for the legal services board (LSB) and ABS licensing system to be set up. Instead, LDPs will be available once the Act is enacted, which could be in summer 2007.



Lord Falconer said 'the fact that we are allowing [LDPs] to emerge in advance of alternative business structures answers a key recommendation' from the joint parliamentary committee which examined the draft Bill. The committee urged the government to show 'less haste' over ABSs, and called for a four-stage implementation.



But on other issues the Lord Chancellor gave little sign of compromise, both in the Lords and at a debate on the Bill held this week by the City of London Law Society and City firm Barlow Lyde & Gilbert.



He rejected calls to modify the provision allowing the Secretary of State for Constitutional Affairs alone to appoint the head of the LSB, which critics say could damage at least the perception of the legal profession's independence, especially abroad. He insisted that calls for him to act instead in consultation with the Lord Chief Justice 'wouldn't remotely deal with the argument if it had any force'.



He added that ministers already appoint the Lord Chief Justice and the head of the Financial Services Authority and there is no suggestion that their independence is harmed by the process.



He disappointed City lawyers at the debate by refusing to exclude altogether from the licensing regime 'low-risk' ABSs - such as large firms that just bring in non-lawyer managers into the partnership. Under the Bill, they will have to apply for exemption, but Lord Falconer claimed the process 'will trouble firms very little'. Peter Williamson, head of the Law Society Regulation Board, told the debate this was an unnecessary 'elaboration'.



The Lord Chancellor refused to accept that the government should contribute to the estimated £27 million start-up costs of the new regime, saying it currently contributes nothing. Lord Hunt of Wirral - the solicitor who chaired the joint committee - warned that some anticipated a one-off doubling in the practising certificate fee to cover these costs.



By Neil Rose