Frank Maguire, senior partner at Thomsons Solicitors, one of the Glasgow’s largest firms, fears the so-called “Tesco law” will undermine his profession’s integrity and independence by allowing firms to be able to raise capital from outside investors, while banks and supermarkets could offer a full range of legal services.
The proposed changes, contained in a Bill currently going through the Scottish Parliament, have divided Scotland’s 10,500 solicitors, and the arguments are becoming increasingly heated.
Mr Maguire believes that by allowing non-lawyers to open legal services will be a blessing only for organised crime as it would be impossible to monitor whether those running the new firms had criminal records.
“If you had a legal firm, or someone wanted to set up a legal services-provider, that could in future be done by a drug baron who could use it as a legitimate front to launder money,” he told The Herald.
“If we opened up legal services then sophisticated organised criminal networks would be able to run them or put their own people in place.
“The financial memorandum says there is £1,300 to monitor whether those opening new firms have criminal records. Even £100,000 would not cover it.
“It means putting in jeopardy the independence and integrity of the legal profession. Those working in such businesses would not even have to be lawyers under the Bill. They could be legal service-providers with just one lawyer.
“Lawyers are no angels but we don’t just work for profit. There is also an element of public service. This Bill has been looked at in terms of profit but what will the public really gain?”
England and Wales have already agreed to introduce the Tesco law. But three years ago, when considering that move, Douglas Mill, the then-chief executive of the Law Society of Scotland, warned it would increase the risk of money-laundering and could even lead to the profession being used by criminals as a Liberian-style flag of convenience.
In May 2008, at a special general meeting, the proxy vote was 801 for and 132 against the Tesco law. For some, that position has now changed and opponents have called for a referendum.
Philip Yelland, director of regulation at the Law Society of Scotland, said: “The society recognises that the whole challenge of external ownership is one which is of real concern.
The Bill, as it stands, already makes clear that regulators will need to have tests in relation to the ‘fitness to own’ of outside investors.
“The Bill only sets out the framework and any potential regulator will need to set out in their regulatory scheme details of ‘fitness to own’ tests.”
A special general meeting and vote was adjourned on Thursday but there will be an online referendum over the next two weeks in which solicitors can vote. There will then be another referendum on the Law Society’s future.