The Bar Standards Board (BSB) has gained approval from the Legal Services Board (LSB) to become a licensing authority for alternative business structures (ABS) almost two years after it announced its intention to obtain a licence.
The BSB said in June 2013 that it wanted to make the process for barristers to establish ABSs ‘more flexible’. At the time of the statement, barristers could set up ABSs but had to be regulated by another approved regulator such as the Solicitors Regulation Authority.
The BSB’s own licence was granted yesterday by the LSB, eleven months after its original application was submitted. The licence will allow the BSB to grant permission for lawyers and non-lawyers to open and manage businesses providing reserved legal activities.
The BSB intends to open its ABS application processes in October this year, pending on the licence being approved by the Ministry of Justice.
In the decision outlined by the LSB, licensing criteria has established with the aim to restrict the BSB’s licensing regime to low risk, advocacy focussed ABS whose activities are broadly similar to those of self-employed barristers.
Although the LSB acknowledges that restrictions on the BSB’s licence ‘may appear quite restrictive’, as part of its licensing approval the BSB will carry out a formal review of its restrictive licensing criteria after two years as it ‘develops a better understanding of how the market develops’. The LSB said the BSB’s cautious approach ‘could be viewed as sensible in the light of its limited experience of regulating entities to date’.
BSB director of supervision Oliver Hanmer said: ‘It is testament to our desire to encourage innovation and competition and to improve access to justice within the legal services market.’
Under the Legal Services Act the LSB has 12 months to make decision on a licensing authority designation application.