Act opens way for accountants to join legal firms

'Responsibility': Paul George

Senior accountants considering a move into the legal sector are set to benefit from new legislation due to come into effect next year.

Under the legislation ­ which has been described as a ‘big bang’ for the legal profession ­ 25% of partners in law firms can be non-lawyers.

Four in five (82%) of law firms expect to join forces with other professionals after the Legal Services Act comes into force, a survey from Smith & Williamson has found.

In 2007, 77% of law firms anticipated joining forces with other professionals and in 2006, 78%.

Upon entering a legal partnership arrangement, accountants cannot solely act as passive investors, but must provide ancillary services ­ such as tax advice to the firm’s clients.

The reform highlights the similarities between the two professions, whether in the nature of their work ­ tax advice, insolvency and consultancy ­ or the partnership structure of firms.

Chas Roy-Chowdhury, head of taxation at the ACCA, predicted that the Act would encourage crossover between the professions but said he did not expect an exodus of senior accountants to law firms.

Previously, accountancy firms have been open to recruit professionals from outside the profession but law firms have remained closed to accountants, he said.

‘It’s good news that the ring-fencing of certain types of work has been opened up for accountants,’ he said. ‘This [legislation] will bring greater opportunity for accountants,’ he said.

Mark Bishop, president of the Institute of Legal Executives, welcomed the legislation, which he said would create more career opportunities for people in the legal profession and other professions, including accountancy.

He predicted the Legal Services Act will lead to alternative business structures in which legal executives will be able to work in partnership with accountants, where lawyers may handle the legal aspects of a property transfer or be involved in actions in the High Court or County Courts
Giles Murphy, a director at Smith & Williamson, said: ‘The introduction of the Legal Services Act will undoubtedly prove to be a milestone in the evolution of legal services in the UK.

‘You only have to look at the effect that deregulation has had on other sectors to see how wide ranging the impact could be.’

Accountants who transfer to a law firm could find themselves working for a listed company, if law firms decide to raise capital through the stock market by going public.