English firms backed by private equity are entering the Scottish legal market in anticipation of alternative business structure (ABS) reform. Although a limited form of ABS was permitted by the Legal Services (Scotland) Act 2010, the regulatory regime was never implemented. The Regulation of Legal Services (Scotland) Act 2025 represented a further liberalisation in law firm business structures, removing the requirement for majority lawyer ownership but implementation of this new regime is taking a back seat, given the many other regulatory change the new Act requires
Stowe Family Law and Higgs, as well as earlier investment activity involving Irwin Mitchell are examples of firms backed by external investment, that are able to expand into Scotland, or structure transactions in ways that comply with existing rules, before the Scottish ABS regime has formally come into effect.
This illustrates a wider point about legal services markets and regulation: Even where formal reform is delayed, firms and investors may still be able to adapt to changing conditions by working within existing legal and regulatory frameworks. The result is that market behaviour can begin to shift in anticipation of reform, rather than only once new rules are fully in place.