As part of yet another review of how it manages the profession, the Solicitors Regulation Authority (SRA) is mulling a ‘fundamental shift away from prescriptive rules’ with a proposal to allow practising solicitors to give advice from unregulated firms.
Outlined in a pre-consultation paper released yesterday, the body is carrying out a phased review of how it regulates and is looking to give firms ‘greater freedom to run their businesses as they need to.’
The position paper says solicitors would be free to practise in the wider legal services market, and deliver ‘non-reserved legal services’ to the public outside of firms regulated by the SRA.
It added: ‘We do not consider that these changes will represent in any way a reduction or “watering down” of the solicitor brand. On the contrary…with increased visibility and accessibility of solicitors, people can choose a qualified professional when that is what they want or need. Ultimately, the “solicitor brand” will stand or fall on whether it remains relevant, and in particular if the reputation for excellence is matched by actual consumer experience.’
SRA chief executive Paul Philip said: ‘Individual solicitors should be able to deliver legal services to the public without being in an authorised entity. The public should be able to access legal advice from a number of sources and from legal advisers who are not qualified lawyers.’
He added: ‘The obvious thing the Legal Services Act did was create Alternative Business Structures – only 400 out of 10,500 firms are an ABS. The reason there isn’t more innovation is we weren’t quick enough to change the rules. We’ll see more of that, and different types of models. We can do more.’
According to the SRA, the objective is to provide greater freedom to firms and solicitors and subsequently provide ‘more choice and access to services for the public’ and plans to review amending the accounts rules to formalise appropriate protections for the clients of those firms that wish to use third-party escrow accounts – holding accounts managed by an external provider – rather than hold client money.
The proposed model would offer protections to the public using solicitors who deliver such services through unauthorised organisations, such as recourse to the Legal Ombudsman. There will also be restrictions around holding client money, while putting in place personal responsibilities around professional indemnity insurance, and limiting access to the Compensation Fund.
The second phase of the handbook review will include the rules on discipline. None of the changes are expected to come into force before the spring of 2017.
Further changes mulled by the SRA includes overhauling the rules for in-house lawyers in response to the Legal Services Board’s consultation on whether the current rules are too restrictive.
The full position paper can be read here.