16 October 2018

Case Study: One of our first BSB authorised entities

William McCarthy was called to the Bar in 1996. His entity was one of the first that we authorised. He now practices exclusively through that entity in several areas of law including personal injury, commercial, and business law, as well as defending in motoring offence cases.

We have interviewed Mr McCarthy and he shares his reasons for becoming a BSB authorised entity below:

Why did you chose to become a BSB authorised entity?

"It had been part of my plan to incorporate since before I left traditional chambers in 2008. Not being a fan of inefficiency or imbalance in any business model, I actively and fully participated in all of the subsequent consultations so as to have some input into how those entities could ultimately 'look'.

"I have decided to become a BSB entity, rather than a Solicitors Regulation Authority (SRA) regulated one, because the final result is very much one that resembles the kind of business structure that suits barristers: an even more efficient way to offer bespoke, non-volume, quality legal solutions to end clients - whether they be professional or lay clients."

What do you see as the main benefits of entity regulation - for barristers or consumers?

"At the Bar, we are used to providing specialist, focused advice and representation to clients and adopting a high degree of accountability and responsibility for the service provided.

"I just think that to build that same level of service into a more expandable and commercial format means that clients get access to justice in a more flexible way.

"I have decided to become a BSB entity, rather than an SRA regulated one, because the final result is very much one that resembles the kind of business structure that suits barristers"

"And we can be more commercial in our approach. It will be interesting to see what different models and structures emerge but, however you look at it, those new ways of doing things simply weren't possible one month ago and that evolution must be a good thing for the legal services market."

What are your thoughts on Entity Regulation for the future?

"I really just hope that the traditional chambers structure and constitutions will readily adapt to accommodate individual barristers who want to convert to being single person entities but remain as members.

"That aspect doesn't really affect me personally but it really does matter: at the very least, it is high time that barristers had the benefit of limited liability as opposed to the kind of open ended personal liability that has existed to-date."

The Application/Assessment Process

How have you found the application process?

"The application form itself - or rather online portal - is not easy, that's for sure. It is a detailed process and there were many concepts that were new to me - setting out a formal business plan, detailed year on year financial forecasts, and planning for emergency situations, for instance.

"Once I got past that conceptual shift to forward thinking and contingency planning though (and found some online business planning software!), it was very manageable and the entity regulation team are clearly adopting a very co-operative approach."

"No doubt that there will be an appetite in the market for further variation."

Were there any elements that you found particularly difficult, or that could be improved?

"The main issues for me related to the additional documentation that had to be drafted so, for instance, for the Business Continuity Plan I had to research other sectors in order to work out what one was and should contain.

"I think that, going forward, the BSB would not be diluting the process if they were to provide suggested (but not obligatory) precedents or pro-formas in relation to such documents and/or they signposted barristers to certain business planning tools."

How did you find the assessment process?

"Rigorous whilst being consultative, transparent and, I have to say, friendly."

Were you kept fully informed as to why the BSB was asking for particular information?

"Yes I was."

Alternative Business Structures

What are your thoughts on the BSB's application to the Legal Services Board, for the right to regulate Alternative Business Structures (ABSs)?

"To be honest that's not on my personal radar quite yet, but it has to be the right move from a regulatory and commercial perspective. The interesting question will be the Bar Mutual's position in this regard and whether, unlike with single person entities this time round, they will at this other extreme be selective in their choice of insured and, if so, to what extent.

"Law firm insurance in the open market is a difficult territory to navigate. Be that as it may, I have no doubt that there will be an appetite in the market for this further variation particularly to accommodate 'family business' or 'partnership' type arrangements."