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Solicitors who offer financial services and plan to become alternative business structures could be forced out of the market by plans to plug a gap in consumer protection created by the Legal Services Act, the Financial Services Authority has admitted.

The cost of a solicitor’s practising certificate is set to fall 23% this year – even more than anticipated – we can reveal. Meanwhile, the SRA is to be given the power to ensure that ABSs cannot manipulate their turnover to reduce the fees they have to pay to operate.

Competition from alternative business structures has emerged as a significant worry to top law firms, a new survey has shown. While the finance directors at the top 100 firms were most concerned about the impact on profitability of downward pressure on fees from clients, 46% said the consequences of deregulation are a high or medium risk to profits.

Alternative business structures should not be introduced until stronger provisions are put in place to stop those convicted of dishonesty from taking a stake in them, a leading Conservative peer has said. Lord Hunt of Wirral called on the government to introduce exceptions to the Rehabilitation of Offenders Act 1974.

The four years since the Legal Services Act have seen “positive changes” for consumers, but many problems persist, the first ever assessment of the reforms has concluded. The consumer impact report, published today by the Legal Services Consumer Panel, says consumers usually get the outcomes they want and most are happy with the service they receive – although it points out that they have little experience against which to judge this.