Solicitors must not abandon their principles when forming partnerships with professionals outside the legal sector, the Solicitors Regulation Authority’s chief executive has said.
Antony Townsend told the annual Association of Personal Injury Lawyers (APIL) conference that the sector was ‘complicated’ by recent moves by two of the UK’s biggest insurers, Ageas and Admiral, to join forces with law firms as they tackle the ban on referral fees.
There would be close scrutiny of such ventures, Townsend, whose organisation is responsible for approving potential alternative business structures (ABS’s), told delegates.
‘There are a variety of players here and it’s not clear to consumers who is acting for whom,’ he said.
‘We are looking at the question of insurer ownership in ABS and the question of governance and potential conflict of interest. We need to be absolutely clear that ownership and governance and the independence of solicitors do not get muddled up. It is very important solicitors go back to their fundamental principles.’
Fareeda Jaleel, founder of FRJ Business and Marketing Solutions, said that while established firms must stay true to the core principles that are the cornerstone of their business, embracing the ABS structure could also be very beneficial.
‘Bringing a more corporate management structure and competitive spirit to capturing clients is something law firms should not be afraid of,’ she said.
‘It will allow firms greater flexibility, slim down their costs and improve their profitability, as well as helping provide a greater value service for clients.’
Meanwhile, APIL also warned that forthcoming RTA Portal costs rules will significantly cut income – by an average 16% – even if solicitors take a success fee from their clients’ damages.