The Legal Services Board has seen a high level of interest from banks and private equity houses in the run-up to the introduction of alternative business structures, its chair David Edmonds told the Gazette in an interview last week.

Edmonds, who was reappointed for a further three-year term at the overarching legal regulator last month, said there had also been ‘a lot of interest’ in ABSs from law firms and barristers’ chambers.

He said: ‘Over the last 18 months to two years, LSB chief executive Chris Kenny and I have had discussions with banks, clearing banks, private equity houses, groups of lawyers, barristers’ chambers, and the Co-op, which is a major interested player.

‘We have had scores of conversations with people who want to know more about ABSs. That is not to say they will all come in in the first wave. But there is a lot of interest.’

Edmonds added that he had received a lot of inquiries from lawyers, with some looking at setting up consortia to operate a franchise system.

‘At this stage I am very pleased with the level of interest,’ he added.

Edmonds’ remarks chime with comments made by Anthony Townsend, chief executive of the Solicitors Regulation Authority, last week. Townsend told the Gazette that the SRA had received ‘quite a number’ of inquiries from new market entrants about becoming ABSs.

Edmonds also gave a robust defence of criticisms levied at the LSB by the Law Society last month, in Chancery Lane’s response to the oversight regulator’s draft business plan.

The Society suggested that the LSB may have overstepped its ‘proper business’ by ‘placing increasing emphasis on considering the skills, distribution and makeup of the legal sector’.

Edmonds said: ‘I rebut any notion that there is "mission creep" in any sense. If you look at the wording of the Legal Services Act, we are required to "encourage an independent, strong, diverse and effective legal profession". We are simply doing what the act asked us to do.’

Edmonds also dismissed Chancery Lane’s suggestion that the LSB should be seeking to reduce its budget, rather than maintain it at £4.9m for another year.

He said: ‘At £4.9m, our budget is well under the forecast that the Law Society made about what we would cost… There are only 32 staff, and there have been pay freezes in place for the past two years.’

On education and training (E&T) in the profession, Edmonds noted that there was a clear need to improve both the professional standard and the diversity of those entering the profession.

He said: ‘I talk to a lot of lawyers, and there is a huge amount of comment that the education and training processes are not producing the kind of entrants to the legal profession who are needed.’

The LSB chair said he was keeping a ‘sharp eye’ on the E&T review currently being undertaken by the SRA, Bar Standards Board and Institute of Legal Executives Professional Standards. He said he was ‘slightly disappointed’ by the current pace of the review.