Welcome to our Spring 2011 edition of Professional Practice, the regular newsletter from Baker Tilly's Professional Practice Group.

We start this edition by asking you to participate in the second phase of our Legal Services Act survey. The results of the first part can be seen on our website and this second part will show how views on the Act have changed over time.
 
With the Legal Services Act still in mind we then explore the benefits of structuring your practice as a hybrid LLP. We then provide an update on solicitors' medical report fees, which can now be treated as disbursements for VAT purposes. With 2010 now behind us we also look forward to 2011 with our professional practices outlook. Will this year be better than the last?
 
Finally a thank you to all those who filled in our interest-skimming survey. We had an excellent uptake and were able to use your comments to tailor our response to the consultation.

We hope you enjoy our newsletter, please do contact us if you would like more information on any of the topics covered.

Articles

Legal Services Act Survey
Six months ago we embarked on a project to gauge the movement over time in the attitudes and actions of legal firms in response to the opportunities and threats which will arise when the full provisions of the Legal Services Act come into force later this year. More than 100 firms responded to the first round of our survey and the results can be seen on our Legal Services Act page.

The hybrid LLP - a new business model for the professional partnership?
We are working with a number of firms who have moved or are currently thinking of moving towards equity participation structures, in which the capital value of the firm is realised and allocated to partners in quantifiable shares. Read more

Medical report fees can be treated as disbursements
The First Tier Tribunal has now released its long-awaited judgement in an appeal taken by the personal injury and clinical negligence solicitors, Barratt, Goff and Tomlinson (BGT) and supported by The Law Society. Read more

Professional practices outlook 2011
The outlook for professional practices in 2011 looks mixed. Banks have become less committed to supporting professional firms in general. Instead, and this is key, they are looking at the fundamentals of each firm on its merits. Read more

Interest skimming - feedback from our survey
 
Thank you to who responded to my note on the Ministry of Justice (MoJ) interest-skimming proposals. I thought it would be helpful to share some of the feedback with you.
 
In total, 71 people completed the short questionnaire. Of these, half had not been aware of the proposals. This is very disturbing considering the number of firms that would be affected if these proposals came into force. In short, neither of the two schemes being suggested by the MoJ met with approval and virtually all those responding felt the schemes would cause additional administrative costs and pressures. 
 
I also received many detailed comments about the proposals. Real concerns were expressed about the practical difficulties of administration and also the loss of interest to firms, particularly those specialising in conveyancing work, as they could be disproportionally hit.
 
However, the main focus of the comments was centred on why the legal profession should be funding legal aid at all, rather than the tax payer? Some very strong views indeed were expressed on this point.
 
The consultation period has now closed and Baker Tilly, together with many other organisations, has put forward a formal response. We wait with interest to see whether the MoJ go back to the drawing board.