New forms of practice and regulation
Legal Services Act—current highlights
- Participate in our consultations on specific aspects of regulatory change required by the Act.
- Read our strategic paper—Legal Services Act: New forms of practice and regulation.
- Find answers to your questions about the Legal Services Act.
Legal Services Act—our approach
The Legal Services Act received Royal Assent on 30 October 2007. The Act ushers in important opportunities for solicitors to team up with non-lawyers and to attract capital for their businesses in a carefully regulated environment. The framework of the regulation of legal services will change radically.
We aim to provide solicitors with key information and clear, authoritative guidance on what the Act means for them and their firms. On several related issues, we will need to consult you.
For answers to a series of your questions about the Act and the changes it requires, please read on.
We have described the way the SRA plans to approach the regulatory changes required by the Act in a strategic paper that addresses many of the key questions below—Legal Services Act: New forms of practice and regulation.
Following the links in the answers below will take you to the most relevant sections of the paper. We hope you also find useful the accompanying Glossary of terms.
We believe the paper deals with matters of importance to anyone who
- has an interest in the delivery of legal services, including consumers and bodies that represent consumers,
- is working in a legal practice or hopes to do so, or
- is involved in procuring legal services.
We encourage all these people to read it in full.
We published the strategic paper a matter of days after the Act received Royal Assent, along with an invitation to comment on it. The deadline for submission of comments was 14 December 2007.
Legal Services Act—consultation, feedback
We are consulting on several aspects of regulatory change required by the Act.
Open consultations
- Consultation paper 9: Draft SRA Practising Regulations [2009] – ends 9 June
- Consultation paper 10: Compensation fund – ends 6 June
Closed consultations
- Consultation paper 1: Character and suitability test for LDP non-lawyer managers – ended 31 March 2008
- Consultation paper 2: Changes to the Framework of Practice rules (PDF 526K) – ended 21 April 2008
- Consultation paper 3: Miscellaneous amendments to the Code of Conduct (PDF 192K) – ended 21 April 2008
- Consultation paper 4: Changes to the Solicitors' Accounts Rules 1998 (PDF 299K) – ended 21 April 2008
- Consultation paper 5: Changes to the Recognised Bodies Regulations (PDF 350K) – ended 21 April 2008
- Consultation paper 6: Client financial protection – ended 23 April 2008
- Consultation paper 7: Information requirements from firms in the context of a risk-based approach to regulation – ended 30 April 2008
- Consultation paper 8: Changes in regulatory processes for firms and individuals – ended 30 April 2008
To find out more about any of our consultations, please visit consultations.sra.org.uk or subscribe to SRA consultation alerts.
Legal Services Act—your questions answered
- What are the biggest changes the Legal Services Act will bring about?
- What will happen first?
- What is a legal disciplinary practice (LDP)?
- Who will regulate LDPs?
- How long will it be before LDPs can be set up?
- What is an alternative business structure (ABS)?
- Who will regulate ABSs?
- What is the time scale for allowing ABSs to start?
- Does the Legal Services Act affect in-house lawyers?
- How will sole practitioners be affected by the Legal Services Act?
- Will the changes brought about by the Legal Services Act have any effect of the practising certificate fee and how I renew my practising certificate?
- Obviously, the SRA will be greatly affected by all this. What do you plan to do?
- I can't understand how the SRA can regulate me both as an individual and through the firm I work in. Surely it must be one or the other?
- Can I influence what's going to happen now, or is everything done and dusted now the Act has been passed?
- How can I stay in touch with all of these changes?
What are the biggest changes the Legal Services Act will bring about?
The Act does three main things:
- It creates a new body, the Legal Services Board (LSB), to supervise the regulation of legal services by all approved regulators, such as the SRA and the Bar Standards Board.
- It creates a new independent ombudsman service, the Office for Legal Complaints (OLC), to deal with consumer complaints arising from legal services provided by all lawyers. The OLC will deal only with redress—not with regulation.
- It enables new forms of legal practice to develop—both legal disciplinary practices or LDPs (organisations involving different kinds of lawyers but still providing legal services) and alternative business structures or ABSs, which will permit external ownership of legal businesses ("Tesco law"), multidisciplinary practices (providing legal and other services) and many things in between.
What will happen first?
The changes will not happen overnight. The Ministry of Justice makes the following estimates:
- While the chair and the board members of the LSB may be appointed throughout 2008, the board may not be empowered (to supervise approved regulators etc) until early 2010.
- While the chair and the board members of the OLC may be appointed throughout 2008, the OLC may not be empowered to handle complaints until autumn 2010.
- Amendments to the SRA's statutory powers to enable it to regulate LDPs need not wait for the LSB to be empowered—and they can be commenced when the SRA is ready. Current estimates suggest that this will not be until early 2009.
- ABSs cannot be authorised until the LSB is empowered and has decided the detail of the new licensing scheme required by the Act. Approved regulators, such as the SRA or the Council for Licensed Conveyancers, will then need to apply to the LSB to become licensing authorities for the purpose of ABSs. Some think that it is likely to be at least late 2011 before ABSs will be able to apply for a relevant licence to operate.
What is a Legal Disciplinary Practice (LDP)?
A legal disciplinary practice (LDP) is a new form of practice permitted by the Legal Services Act. The Act enables existing regulators to authorise firms to be owned and managed by a combination of types of lawyers, and could include a minority of non-lawyers.
Who will regulate LDPs?
The Act amends the statutory powers of existing front-line regulators—such as the SRA and the Council for Licensed Conveyancers—to authorise LDPs.
How long will it be before LDPs can be set up?
It is likely that the process of introducing the regulatory regime for LDPs will be completed during the first half of 2009.
What is an alternative business structure (ABS)?
Alternative business structures (ABSs) will allow lawyers to form multidisciplinary practices with other kinds of professionals—accountants, for example. They will also allow non-lawyers to own firms that provide legal services.
Who will regulate ABSs?
The SRA aims to become authorised by the LSB as "licensing authority" for ABSs. Other approved regulators may also seek authorisation.
What is the timescale for allowing ABSs to start?
The ABS regime is unlikely to be available until at least 2011 or, more likely, 2012.
Does the Legal Services Act affect in-house lawyers?
The Act amends the statutory powers of existing regulators so that they can develop firm-based regulation. Firm-based regulation is not likely to affect in-house lawyers who provide legal services mainly to their employer. It may affect in-house lawyers who currently provide services to the public under rule 13 of the Solicitors' Code of Conduct 2007.
How will sole practitioners be affected by the Legal Services Act?
The Act specifically provides for firm-based regulation of unincorporated sole practitioner firms.
More: how will sole practitioners be affected by the Legal Services Act?
Will the changes brought about by the Legal Services Act have any effect on the practising certificate fee and how I renew my practising certificate?
Changes required by the Act will have an impact on the annual practising certificate exercise.
More: changes to annual practising certificate exercise
We are unlikely to implement significant changes to the fee structure before 2010.
Obviously, the SRA will be greatly affected by all this. What do you plan to do?
We have adopted some broad principles to drive our approach to the changes. In late 2007, we invited your views on whether the principles are appropriate and sufficient.
I can't understand how the SRA can regulate me both as an individual and through the firm I work in. Surely it must be one or the other?
The basis of the Act is that both the entities and the individuals providing reserved legal services must be authorised.
Can I influence what's going to happen now, or is everything done and dusted now the Act has been passed?
In late 2007, we invited you to comment on our initial thinking. The concerns expressed are being taken into account as we develop new rules, regulations and procedures. We are consulting stakeholders on a number of separate occasions while working on the detail of the changes.
How can I stay in touch with all of these changes?
We encourage you to bookmark this page (sra.org.uk/LSA). Our e‑newsletter, SRA Update, includes news about our plans and progress. You can also sign up for SRA consultation alerts.
