Hansard

I appreciate that the level of excitement about today's debate is not quite on all fours with the anticipation for Saturday's 5 pm kick-off at Hampden Park, but I am grateful to all members who have agreed to participate.

In a democracy, the rule of law is often said to be so fundamental that it is the most important matter that a Government can deliver. Clearly, a regulated, appropriate and integral legal profession is a fundamental aspect of that. For that reason, whatever view some might have about a debate that is very much related to legal matters, the issue is fundamentally important. Therefore, I welcome the opportunity to introduce today's debate on the structure and regulation of the Scottish legal profession.

As many members know, I was proud to serve in the legal profession for 20 years, but I have now moved on to another calling. Some might call that jumping out of the frying pan into the fire given that, in a 2004 poll, politicians were ranked higher than lawyers—somewhere between public relations agents and reality television show contestants—in the list of most hated professions.

Joking apart, the profession has served Scotland well. Alongside the church and the education system, the legal profession has formed one of the fundamental pillars of Scottish identity within an incorporating union for more than 300 years. It is perhaps not going too far to say that, were it not for the strength and independence of the Scottish legal profession, we would not be having today's debate. That immense debt will not be forgotten by the Scottish Government.

The debt is not just historic. In the budget document that we published yesterday, we set out our strategic objectives for Scotland. Two of our most important objectives are that Scotland should be wealthier and fairer and that it should be safer and stronger. A flourishing and independent legal profession is a fundamental underpinning of both those objectives.

The legal profession is a key part of our institutional framework, not just as a point of constitutional theory but because it does vital work. Lawyers help people at times of crisis and bereavement, they protect the rights of the vulnerable, and they support business and economic growth. When people buy their first house, get into matrimonial difficulties or become involved in the criminal justice system, lawyers and the legal profession come to their aid. Therefore, I will defend the legal profession against those who malign and misrepresent it. The Government will work with the profession to ensure that the challenges of the future can be met within a reformed and improved legal system.

Reform and improvement are needed because the world is changing—fast. An ordinary family today faces legal issues that would have been unknown to our grandparents' generation. Such issues include advice on financial services, resolving disputes with education authorities and taking action against antisocial neighbours. In addition, businesses may not use Scottish lawyers or the Scottish courts if they can get a faster and better service elsewhere. We need to address that. I know that Scottish lawyers can deliver excellent services in new areas of law as well as old and that they can compete with the best in the world. We need to ensure that they are not held back by inappropriate restrictions and regulations that do not meet modern needs.

The United Kingdom Parliament has just passed the Legal Services Act 2007, which creates a new legal services regulator, opens the door to mixed practices of lawyers and other professions and allows third-party ownership of law firms. That is an English act, but it has fundamental effects on Scottish firms.

Our major law firms compete internationally—it is good for Scotland that they aspire to reflect, and go above and beyond, the daily practice of other sections of Scottish business such as financial services and accountancy—and Scots have always been prepared to think big and to think globally. One of the world's biggest accountancy practices—Ernst & Young—still bears the name of Arthur Young, the Scot who set up the practice a century ago. Today, we can be proud of the success of businesses such as the Royal Bank of Scotland, which proves that we can compete with the best. We must not hold back those in our legal profession who aspire to similar success.

The pressures of change affect not only the big commercial firms but our high street firms. Many of them find it difficult to recruit trainees or to pass on their business to new partners. Firms that offer a broad range of legal services struggle to compete with firms that specialise in high-value work such as corporate business or high-volume work such as remortgaging. Many of the core business activities of law firms are not restricted to solicitors, so alternative providers and English firms are entering the market.

I can understand why some in the profession might feel concerned about the changes and that the profession is under threat, but that is not how I see it. As I told the Law Society of Scotland conference, I was impressed by how Bob Ayling, of British Airways, warned a group of travel agents some years ago that the internet was coming and that only those who adapted to it would survive. I know that many in the industry heeded that advice, developed new products—in specialised in-bound and out-bound tourism markets, for example—and prospered as a result. For me, the issue is not to wonder whether alternative business structures will change things but to respond to the changes that are already happening.

The debate is already under way. In 2006, the previous Administration published its "Report of the Research Working Group on the Legal Services Market in Scotland", which identified the need for further policy development by the Scottish Government, working with interested parties. In July, the Office of Fair Trading published its response to the super-complaint that Which?—the Consumers Association—had submitted. The OFT report argues that many of the current restrictions on business structures that affect solicitors' firms and advocates should be lifted.

Currently, all solicitors' practices operate under a partnership model. Only solicitors can be partners and no one else can own a firm of solicitors that offers services to the public. All advocates operate as sole traders and cannot enter into any form of partnership with solicitors or other professionals. There are restrictions on advocates taking instructions directly from clients and on their appearing with solicitor advocates in the same case. The OFT believes that lifting those restrictions could offer consumers a better choice and has asked the Scottish Government to set out a policy statement before the end of the year.