Annual general meeting - 27 May 2010

Report of AGM

Scottish solicitors today voted for a compromise over the proposed introduction of alternative business structures (ABSs).Two motions allowing forms of ABS were backed at the Law Society of Scotland's annual general meeting in Edinburgh. A third motion opposing all forms of new structures was defeated.

The first successful motion, proposed by the Law Society, suggested allowing 51% ownership of firms by solicitors or solicitors with other regulated professionals and 49% external capital. It was carried by 1,486 votes to 1,465, with one abstention. The other successful motion would permit 25% non-solicitor ownership of firms but no external investment. It was proposed by Mike Dailly, of Govan Law Centre in Glasgow. A total of 1,550 votes were cast in favour of the motion, with 1,404 against and three abstentions. The defeated motion, by the Scottish Law Agents Society (SLAS), was opposed by 1,503 votes, with 1,450 in favour and two abstentions.

Law Society President Ian Smart welcomed the moves to a compromise position.

He said the motion of the Society's Council would prevent outright external ownership, for instance by supermarkets, but allow firms to compete in a changing marketplace. He said: "It allows new and innovative business structures and, crucially, it permits our largest cross-border firms to compete with their business rivals south of the border." He recognised the strong differences of opinion in the profession over ABSs, adding that safeguards against some of the concerns could be built into any licensing scheme devised by the Society as a regulator of any new structures.

Mike Dailly said the model he proposed would protect the independence of law firms, while providing a "Scottish solution to a Scottish problem" rather than following reforms introduced at Westminster. He added: "This motion is reasonable, it's workable and it's a genuine compromise It will safeguard our core values and facilitate innovation and growth. It would retain everything I'm proud of in terms of being a Scottish solicitor."

Craig Bennet, interim President of SLAS, expressed disappointment at the failure of third motion. He said he would accept the decision of the meeting and work with the Law Society, government and others to develop a united way forward. He added: "Independence is the goal which we must not lose sight of."

ABSs are proposed in the Legal Services (Scotland) Bill currently passing through the Scottish Parliament. The two successful motions were due to be discussed by the Society's ruling Council later in the day and any official policy decided will be communicated to the Scottish Government to determine what form of ABS should be permitted.

Other AGM business included the approval of previous minutes as well as the accounts of the Society, the Scottish Solicitors' Benevolent Fund and the Guarantee Fund. Draft practice rules on wills, incorporated practices and foreign lawyers were also approved.

The votes

The results of the poll vote on the three motions were:

On the right you will find the supporting documents for the meeting.