The Bar Standards Board (BSB) will apply to become an official regulator for advocacy-focussed business structures (ABSs) when they are permitted under the Legal Services Act later this year.

At a board meeting late last month the BSB decided it will apply to regulate certain barrister and advocate-led structures in the future, as well as permit those entities and other self-employed barristers to conduct litigation.

Contingent on acceptance by the Legal Services Board, the BSB will regulate advocacy-focussed alternative business structures (ABSs), legal disciplinary practices and barrister only entities as part of the shake up of legal services.

However; it has placed a number of conditions on the entities it will regulate, ensuring they retain advocacy at their heart. The BSB will limit its powers to businesses where the majority of owners/managers are barristers or other advocates with higher rights of audience, and will not regulate entities with more than 25% non-lawyer owners/ managers or multi-disciplinary practices.

Barristers will also be allowed to have ownership interests in ABSs subject to the development of rules and guidance on managing any conflicts of interest, while having the additional option to become owners/managers of an entity. However; barristers and entities regulated by the BSB will not be permitted to hold client money

A consultation on developments permitted under the Act has been ongoing since November 2009, with the BSB expected to be set up to regulate by early 2013. It is expected to cost around £400,000 for the BSB to set-up the regime, which broken down, sits at around £25-30 per barrister.

BSB chair, Baroness Ruth Deech, said: "Nearly 75% of respondents to our consultation agreed that BSB regulation of entities would be in the public interest.

"We intend to target our regulation on advocacy focussed entities, taking a risk-based and proportionate approach. We hope that this decision will allow barristers the freedom to react to changes in the legal market and permit them to devise new ways of working in order to remain competitive and better serve the public."

Fountain Court's Patricia Robertson QC, who has been leading the consultation, said: "It is unlikely that we will see barristers setting up business entities with the kind of numbers of paralegals needed to carry out big litigation cases and simply replicating what is already on offer from existing Solicitors Regulation Authority regulated firms.

"Rather, what I think we will see is barristers doing work at either end of the legal services spectrum: cases where the amount at stake can't bear the overheads of traditional firms, so a firm of solicitors would not want to take it on, or high end cases where a company has a big in-house legal team already and does not need to pay for the services of firm of solicitors, but needs an expert to lead the litigation team."

The BSB is now building a regulatory framework with draft rules which it will issue for consultation this autumn.