The Bar Standards Board (BSB) has launched a third consultation on the Legal Services Act (LSA) to determine whether the watchdog should regulate businesses as well as individual advocates.

The consultation, 'Regulating Entities', was launched today (27 September), the results of which will form the BSB's position as to whether it should become an entity-based regulator of new structures under the Act such as alternative business structures (ABSs) and legal disciplinary partnerships (LDPs).

The consultation will also look whether the cab-rank rule – which requires barristers to accept cases brought to them – can be modified to apply to barristers practising as managers of LDPs.

It will ask opinions on whether barristers should continue to be prevented from providing litigation services and holding client money, two of the most significant restrictions that still exist on the way barristers work.

The review, which is due to close on 23 December, is the third in a series of BSB consultations looking at the LSA.

The first consultation – 'Implications for the Regulation of the Bar' – was launched in February 2008 while the second was launched in December 2008.

The second consultation saw the Bar regulator signal approval for barristers to join LDPs.

LDPs form a key plank of the LSA and allow law firms to add non-lawyers to their partnerships, up to a cap of 25% of total partner count while ABS – often dubbed 'Tesco law' – will allow companies to invest in law firms and provide legal services outside of traditional partnerships.

BSB chair Baroness Ruth Deech said: "This is one of the most significant consultations we have issued to date. These decisions could have major implications for barristers and those who seek their services, as well as for the BSB as a regulator."

She added: "The proposals in the consultation are provisional and we encourage all those with an interest to submit their views and influence the future of legal service provision."

The news follows the result of a recent YouGov survey which indicated that 35% of barristers would be 'likely', or 'very likely' to join a new structure within the next five years if the BSB was to regulate them.