The ongoing disagreement between the ICAEW and the Law Society is set to erupt over the accountancy body's plans to become an alternative business structure (ABS) regulator.
This follows an announcement by the Law Society that it would challenge the ICAEW's bid - submitted to the Legal Services Board (LSB) in December 2012 - to become a regulator of probate services and ABS.
A Law Society spokesperson said: 'While the Legal Services Act 2007 allows for multiple regulators and licensing bodies to operate within the legal services market, it is critical, both for legal professionals seeking to compete in that market and for the clients that they serve, for there to be a level playing field of provision.
'High regulatory standards must be maintained across the board and the risk of regulatory arbitrage must be minimised.
'We are particularly concerned that the ICAEW's application does not appear to propose an equivalent separation of regulatory and representative functions as has been required of other professional bodies within the sector. We will be highlighting our concerns to the LSB and the statutory consultees in due course.'
Should the ICAEW's submission be approved, it will be empowered to authorise individuals and firms for the reserved legal service of probate and to license firms as ABS.
In a writtens statement to Accountancy, the ICAEW said: 'The ICAEW is surprised at the Law Society's comments on our application to become a regulator of probate and ABS. As part of the application process set down by the Legal Services Board (LSB), ICAEW consulted widely during summer 2012 on its application before submitting it. The Law Society chose not to take advantage of that opportunity to comment and didn't provide any feedback to ICAEW or the LSB.
'The ICAEW's current structure reflects the role that it plays in the accountancy profession and we believe it remains appropriate as we look to extend our regulatory remit under the Legal Services Act.'
The Legal Services Act 2007 opened the provision of reserved legal services to competition and enables practitioners, other than lawyers, to become authorised to provide reserved legal services. New multi-disciplinary business structures between accountants and lawyers can also now be set up to provide these services.
The row emerged as research from Smith & Williamson found that over 40% of UK top 40 law firms were preparing to forge new partnerships with non-solicitor-based businesses in the next two years.