Scots Law News has followed the gathering storm about alternative business structures (aka Tesco law) within the solicitors’ branch of the Scottish profession without quite seeing how it would all turn out; and its mystification was deepened by competing accounts of the Special General Meeting about the matter held but not completed by the Law Society of Scotland on 25 March 2010.
The SGM had been requisitioned by the Scottish Law Agents Society in order to move the reversal of the Society’s support for the Legal Services (Scotland) Bill, which would enable non-lawyer ownership of law firms. In the run-up to the meeting, support for the Law Society continuing its existing policy had been voiced in an open letter from 13 well-known larger city firms (listed in an appendix below), while the Scottish Law Agents Society was clearly representing a body of opinion amongst smaller firms, especially outside the major cities. It had also procured the support of a very large number of proxy votes (over 2,300) ahead of the meeting (there were, however, also about 900 proxies in favour of the Law Society’s position).
But in the end the SGM, held in the home of big hits, rucks and mauls at Murrayfield stadium, Edinburgh, became one of those collapsed scrums which have so disfigured this year’s Six Nations rugby championship, as the meeting was adjourned without a vote being taken on the substantive motion. There was a vote on the motion to adjourn, confined to the members physically present, and it was carried by 76 votes to 33, with 12 abstentions. It appears that further discussions are to take place between the competing parties in a search for a consensual position. Nevertheless, as is often the way with collapsed scrums, what the late, lamented Bill McLaren would have called "a bit of argy-bargy", and the living but also lamented Brian Moore (a solicitor, albeit and English one) would call "handbags", broke out between the packs as they got back on their feet afterwards.
While Law Society President Ian Smart was quoted as saying –
“It was clear that as the debate proceeded today, the two sides may not be as far apart as perceived prior to the meeting. The decision to adjourn was taken in the hope that we might yet reach agreement on a way forward that is acceptable to the vast majority of our membership”
– Mike Dailly of the Govan Law Centre waxed furious on his blog, saying that democracy had been “shamed” at the meeting, and adding:
"As the prospect of defeat presented itself to the Law Society’s minority elite they tried desperately to nobble the democratic will of the majority opposition.
They called for a comfort break, and asked opponents if they would agree to a restriction on external ownership whereby ABS providers would be required to have a majority of solicitors. The opposition agreed to enter into dialogue after the SGM but refused to compromise their motion, and pressed for a vote.
Facing certain defeat, Scotland’s Law Society President called for the meeting to be adjourned and seized upon a technical rule whereby only those present in the room could vote, resulting in over 3,000 proxy member votes being discounted. The net result was that 70 members of the profession – including around 50 Council members and a handful of multi-millionaires – voted to disenfranchise the democratic will of over 3,200 members."
The Times report on 26 March saw the result of the meeting as “a humiliating climbdown” for the Law Society, while The Scotsman report said the meeting had “descended into acrimony”. A minute of the proceedings appears here on the Law Society of Scotland website.
Not having been present at the meeting, Scots Law News cannot pronounce on who is to be believed in all this. People we respect have either spoken out strongly against Tesco law, for example here, here, and here, or have been powerful advocates of the change, for example here and here. A notable voice in favour of compromise has been the only female President of the Law Society, Caroline Flanagan (her contribution here). But it is difficult for an outsider to see the truth when the debate has become so polarised.
Three thoughts only. First, if there are, as the Law Society website suggests, around 10,000 solicitors in Scotland, then well over half of them have so far made no attempt to influence this decision. Second, the Law Society and the big firms have been at best uneasy bedfellows for many years, and it is difficult to see this present alliance as one that strengthens the Society’s position in the long run. And third, although we do not seem to have a date upon which the SGM will be resumed, it is clear the proxies will remain to be cast on that occasion.
Appendix: The 13 supporters of the Law Society on ABS
Anderson Strathern LLP
Austin Lafferty Solicitors
Dundas & Wilson LLP
Harper MacLeod LLP
HBJ Gateley Wareing LLP
Maclay Murray & Spens LLP
Semple Fraser LLP
Shepherd and Wedderburn LLP