Legal Business Blogs

Unchaining in-house: LSB looks to cut ‘unnecessary restrictions’ on in-house lawyers

The Legal Services Board (LSB) has raised concern over whether current regulatory restrictions for in-house lawyers are justified, stating that ‘unnecessary restrictions’ on their ability to innovate and expand their reach could ‘adversely affect access to justice’.

Published in late February, the LSB discussion paper aims to establish how current practising rules for in-house lawyers align with the minimum restrictions contained in the Legal Services Act 2007.

A debate that has continuously sparked interest from the profession as in-house counsel numbers expand to over 25,000 in England and Wales, while facing greater corporate scrutiny, the LSB is pushing for a more liberal approach and said ‘removing unjustified burdens is consistent with regulatory objectives, including enhancing the strength, diversity and effectiveness of the legal profession.’

The body has invited regulators to explain their approaches and provide evidence for any restrictions on in-house lawyers, after finding that front line regulators currently take contrasting approaches. It found that the Council for Licensed Conveyancers, ILEx Professional Standards and the Institute for Chartered Accountants in England and Wales ‘do not make specific provisions for those working in-house’; while the Bar Standards Board, the Intellectual Property Regulation Board and the Solicitors Regulation Authority are more aligned but retain ‘some differences’.

It added: ‘Where a regulator places restrictions on in-house practice over and above the minimum required by the Act, we expect it to be able to demonstrate this is necessary with compelling evidence in terms of risk to the regulatory objectives.’

The invitation, which has a 24 April closing date, also extends to all interested parties to help identify areas which could be improved as the body prepares a final report for this autumn. LSB chief executive, Richard Moriarty, said: ‘Some in-house lawyers are thinking about innovating and expanding their reach. The Legal Services Board is concerned that unnecessary restrictions on their ability to do so may have the potential to impose costs and red tape, frustrate choice and adversely affect access to justice. It is important that any restrictions on their practice be clearly justified.’

The body added that it is supporting the SRA’s recent announcement in its 2014/15 business plan to also re-examine the issue.

For more on the role of in-house counsel see Dissent: Platitudes and a missed debate – how GCs are pushed off their ethical course