News releases
SRA approves new rule framework for Legal Services Act implementation
28 July 2008
The Solicitors Regulation Authority (SRA) has agreed a set of changes to its Code of Conduct which pave the way for the regulation of new forms of legal practice made possible by the Legal Services Act 2007 (the Act), including legal disciplinary practices (LDPs) next year.
LDPs are a new type of body which will enable solicitors to take into partnership other lawyers such as barristers and licensed conveyancers—as well as up to 25 per cent of non-lawyer partners. They are an interim development to alternative business structures (ABSs), also covered by the Legal Services Act and often referred to under the term "Tesco Law".
Peter Williamson, SRA chair, said: "These changes are the first step in encouraging innovation and competition in the legal services market through more flexible forms of practice and ones which will ultimately benefit consumers."
Certain rule changes will now need to go through various statutory approval processes by the Secretary of State for Justice's Consultation Panel before they are formally introduced in 2009.
The changes follow 10 consultations with stakeholders earlier this year to amend the existing rules extending the SRA's remit to cover both individuals and the firms in which they work. In addition, the Act changes the regulatory position of sole practitioners, who will need to seek authorisation from the SRA to act as a recognised sole practitioner.
Antony Townsend, SRA chief executive, said: "We had to review both the firm-based and individual authorisation processes to ensure consumer and public protection while at the same time trying to create a more streamlined and efficient system without too much red tape.
"Although the fine detail has still to be established, we believe that firm-based regulation will prove more effective and efficient in terms of the necessary checks and fee collection."
The changes to the Code of Conduct follow the delegation of rulemaking to the SRA by the Law Society announced last week. In brief, the changes will mean
- solicitors will be able to join legal practices regulated by other approved regulators (e.g. the Council for Licensed Conveyancers) as an owner/manager,
- unincorporated partnerships will need to become recognised bodies,
- sole practitioners will need to be authorised as recognised sole practitioners,
- existing sole practices and partnerships will be automatically passported to become recognised without having to undergo any formalities.
Details on the consultations in relation to the Legal Services Act, including reports on responses, are available at sra.org.uk/LSA.