Ethics guidance

Important: The guidance below was written and issued before the introduction of the SRA Handbook on 6 October 2011, and may refer to regulatory material that is no longer in effect. Although it may still be relevant, this guidance has not yet been reviewed in light of the wide-ranging regulatory changes implemented on 6 October. It will be reviewed and updated (or archived) in due course.

 

Last updated 28 August 2009

The Establishment Directive and RELs

1. Overview – the Establishment Directive and RELs

1.1 The Establishment Directive

The Establishment Directive is the Establishment of Lawyers Directive 98/5/EC. It applies to nationals of the Establishment Directive states who are members of the Establishment Directive professions.

The Establishment Directive states are the states of the European Union, the European Economic Area and Switzerland. The Establishment Directive professions are the legal professions named in the Establishment Directive. For a list of the Establishment Directive states and the Establishment Directive professions see Article 1 of the Establishment Directive.

The Establishment Directive gives a lawyer of one Establishment Directive profession the right to practise "on a permanent basis", in another Establishment Directive state, provided that:

  • the lawyer is a national of an Establishment Directive state,
  • the lawyer uses the professional title of his or her own Establishment Directive profession, in the original language, and
  • the lawyer is registered with the regulatory body for the Establishment Directive profession in the host state.

Once registered, the lawyer is subject to the same rules and discipline as a member of the Establishment Directive profession in the host state, and is allowed to do work reserved to members of that profession. After 3 years' continuous practice of host state law in the host state (or in some cases a lesser period), the lawyer becomes eligible for entry to the host state legal profession without having to sit an examination.

See also "What practising on a permanent basis means".

1.2 The UK implementing regulations

The UK Government implemented the Establishment Directive on 22 May 2000 – see the European Communities (Lawyer's Practice) Regulations 2000 (S.I. 2000 No. 1119) (the Establishment Regulations). The Regulations implement the requirements of the Establishment Directive in England and Wales and Northern Ireland by:

  • making it a criminal offence for a member of an Establishment Directive profession (unless he or she is a UK solicitor, barrister or advocate) to practise on a permanent basis in the UK without first registering with one of the regulatory bodies for UK solicitors, barristers or advocates,
  • extending the regulatory and disciplinary regime of those regulatory bodies to lawyers registered with them,
  • giving lawyers registered with a UK regulatory body practice rights similar to the UK lawyers regulated by that body (though with certain modifications), and
  • setting out the terms on which a European lawyer who has practised UK law in the UK for 3 years (or in some cases for a lesser period) may gain entry to the UK legal profession.

In the Regulations "registered European lawyer" means a lawyer registered under the Establishment Directive with any of the regulatory bodies for solicitors or barristers in England and Wales  or in Northern Ireland. But in our rules and in these notes "REL" means a lawyer registered under the Establishment Directive with the Solicitors Regulation Authority (SRA).

The Establishment Directive was implemented in Scotland by the European Communities (Lawyer's Practice) (Scotland) Regulations 2000 (S.S.I. 2000 No. 121).

A lawyer of an Establishment Directive state also has the right to provide services in the UK on a temporary or visiting basis, under the Services of Lawyers Directive 77/249/EEC and the European Communities (Services of Lawyers) Order 1978. These rights are not dependent on being a national of an Establishment Directive State.

1.3 Registration

The UK has three jurisdictions, England and Wales, Scotland, and Northern Ireland.

In each jurisdiction two branches of the legal profession are recognised under the Establishment Directive. The SRA is the regulatory body for solicitors of England and Wales).

Each of the six Establishment Directive professions of the UK has its own regulatory body and its own rules. Once you are registered you will be bound by the rules, regulation and discipline of the regulatory body you have chosen.

Lawyers who must register

A mistake can lead to a criminal offence, so it is very important to know if you need to be registered under the Establishment Directive. You must register if:

  • you are a national of an Establishment Directive state (including the UK)
  • you are entitled to practise as a member of an Establishment Directive profession,
  • you intend to practise as a member of that Establishment Directive profession, on a permanent basis, in the UK, and
  • you are not a member of one of the UK Establishment Directive professions.

You must be entitled to practise under your home title in order to be registered under the Establishment Directive and to remain registered. You will therefore probably need to remain on the register in your home state and pay any fee that entails.

When a state joins the EU its legal professions are brought within the Establishment Directive. The Establishment Regulations include transitional provisions to ensure that lawyers of professions which are newly "caught" (and lawyers of nationalities which are newly "caught") have time to register.

Lawyers who cannot register

If you are a lawyer and you want to practise on a permanent basis in the UK, but you do not meet the criteria for registration under the Establishment Directive, you cannot register under the Establishment Directive. But (subject to immigration controls) you are entitled to establish yourself and practise on a permanent basis in the UK, provided your home state rules or law allow it. You do not have the same rights as a lawyer registered under the Establishment Directive so you will not be able to do work which is reserved to UK lawyers.

"Registered foreign lawyers"

The SRA also keeps a register of foreign lawyers (the RFL register). The purpose of the RFL register is to register foreign lawyers who want to practise in partnership, or in companies or limited liability partnerships (LLPs), with solicitors of England and Wales in a "recognised body" (i.e. an SRA regulated firm).

Registered foreign lawyers (RFLs) are usually either:

  • members of legal professions which are not Establishment Directive professions; or
  • members of Establishment Directive professions who are not nationals of an Establishment Directive state,

whether based in England and Wales or elsewhere.

If you are already an RFL but you now need to register under the Establishment Directive, there is no additional fee if you transfer your registration from the RFL register to the SRA's register of European lawyers during the course of a practising year. You will need to complete an application form and produce a certificate of attestation from your home bar. Transferring in this way will not stop you practising in partnership with solicitors.

1.4 Regulation

Application of home and host state rules

If you register with the SRA, the rules governing solicitors of England and Wales will apply to your practice throughout the UK. You will also remain bound by your home state rules.

Special provisions overriding home state rules

There are two special provisions in the Establishment Directive which vary the general obligation to comply with both home and host state rules:

  • Under Article 6, the host state rules apply to a lawyer registered in a host state "irrespective of the rules to which he is subject in his home member state". The SRA interprets this to mean that in a conflict of rules (where you cannot comply with a host state rule without breaching a home state rule) the host state rule prevails, and you must disregard the home state rule to the extent necessary to enable you to comply with the host state rule.
  •  Article 8 gives a lawyer registered in a host state the right to practise as a salaried lawyer (whether in private practice or in commerce, industry or the public service), to the extent that host state rules allow a host state lawyer to do so. The SRA interprets this to mean that, even if your home state rules do not allow salaried practice, as an REL you will be allowed to practise in employment to the same extent as a solicitor of England and Wales.

Rules affecting your firm

The rules governing solicitors cover not only a solicitor's personal conduct but also the composition and structure of a solicitor's firm, its notepaper, compulsory professional indemnity insurance and other matters affecting the firm as a whole. You will need to put arrangements in place before you register or you would break the rules as soon as you began to practise as an REL.

1.5 Practice rights

As a lawyer registered under the Establishment Directive, your practice rights in the UK will be governed by the regulatory body with which you register, and will include:

  • advising on UK law and Community law,
  • doing work reserved to lawyers regulated by the body with which you are registered, but subject to certain limitations, and
  • practising in partnership or incorporated practice with lawyers regulated by the body with which you are registered, if partnership or incorporated practice is permitted under their rules.

1.6 Right to representation

As a lawyer registered in the UK under the Establishment Directive, you will be entitled to be represented in the professional association for lawyers regulated by the body with which you are registered, and to vote in elections to the association's governing body. If you register with the SRA that means you will be entitled to become a full member of the Law Society (the professional body for solicitors) and to vote and stand for office in Law Society elections.

2. What practising on a permanent basis means

2.1 Some general indications

Practising on a permanent basis in the UK does not mean that you must be settled in the UK for the rest of your life! It means, broadly, that you have a base as a lawyer at a regular and long-term establishment in the UK. It would be an indication that you are practising on a permanent basis in the UK, for example, if:

you are ordinarily resident in the UK and practising as a lawyer, or

you are maintaining a regular practice as a lawyer in the UK, (which includes maintaining an office, branch or agency of your practice in the UK, through which you carry on your professional activities and at which you maintain a regular personal presence), or

if you are employed as a lawyer, and your ordinary place of employment is in the UK.

Practice as a lawyer in the UK can mean participation as a principal in private practice or employment by a law firm, or employment as the in-house lawyer of a non-lawyer business or organisation.

You will not be practising on a permanent basis in the UK if you are providing services in the UK on a temporary or visiting basis under the Lawyers' Services Directive 77/249/EEC.

Residence in the UK

Whether you are ordinarily resident in the UK depends to some extent upon your intention. So if you intended settling permanently or for a substantial time when you arrived, you would have been ordinarily resident from the time of your arrival,

But whether you are ordinarily resident in the UK does not depend only on what you say you intend. Your actions might demonstrate that you are ordinarily resident in the UK – for example, if your only residence is in the UK, or you have settled your family and send your children to school in the UK.

Regular presence in the UK

If you are a principal in a firm with an office, branch or agency in the UK, but you are yourself based outside the UK full-time, you will not be maintaining a regular practice in the UK unless you regularly attend the firm's UK office, branch or agency. The view of the SRA is that:

  • A daily or weekly presence is likely to mean that you are maintaining regular practice in the UK and regular personal presence at the UK office.
  • A fortnightly presence for the purpose of dealing with client matters, drafting documents, appearing in court, etc. might well be considered more than occasional, and therefore as maintaining regular practice in the UK and regular personal presence at the UK office.
  • A fortnightly presence for the purpose of attending partners' meetings and dealing only with matters of management of the firm might not amount either to regular practice in the UK or regular personal presence at the UK office.

Employment or secondment in the UK

If an office in the UK is your ordinary place of employment, you are practising on a permanent basis in the UK. If you are normally based outside the UK but you are seconded to an office in the UK for a term you might not be regarded as practising on a permanent basis if the secondment is for a defined period set to last twelve months or less. But secondment to the UK for a defined period longer than one year, or for an indefinite or renewable period, is likely to be considered as practising on a permanent basis in the UK.

3. Where and with whom to register

3.1 The UK jurisdictions

The UK is a single member state, but has three separate jurisdictions – England and Wales, Scotland, and Northern Ireland.

For the purposes of the Establishment Directive, if you are practising on a permanent basis in, say, England and Wales, you are practising on a permanent basis in the UK. If you are registered in one UK jurisdiction and you undertake work in another UK jurisdiction, you are providing services within a single state. You are not providing services across borders for the purposes of the Lawyers' Services Directive 77/249.

If you are required to register under the Establishment Directive it is enough to be registered in one jurisdiction. You are not prevented from registering in more than one of the UK jurisdictions, subject to the restrictions set out below under "choice of branch of the profession" and "lawyers of the Irish Republic".

The other UK regulatory bodies are

Note that Gibraltar, although not part of the UK, is treated as part of the UK for the purposes of the Establishment Directive.  European lawyers wishing to register in Gibraltar under the Directive must register with the Chief Justice of Gibraltar.  Because Gibraltar is treated as part of the UK, members of UK Establishment Directive professions cannot register in Gibraltar under the Directive.

3.2 Choice of jurisdiction

In most cases it will make sense to register in the jurisdiction in which you will be based. Thus, if you are intending to be based in England and Wales you would normally expect to register with the SRA or with the Bar Standards Board.

However, your rights of practice will be those of the lawyers regulated by the body with which you register - so if, for example, you register with the SRA, your rights of practice in Scotland will be those of a solicitor of England and Wales and not those of a Scottish solicitor.

In order to do work reserved to lawyers (advocacy, litigation, drawing court documents, conveyancing, probate applications or drawing trust deeds) within any of the UK jurisdictions, you will need to be registered in that jurisdiction.

There may be other reasons for wishing to register in one jurisdiction whilst you are based in another – for example, you may intend to practise as a partner in a firm of Scottish solicitors, based at their London office; and if you do not intend to carry out any of the activities normally reserved to solicitors of England and Wales, you may find it most convenient to register with the Law Society of Scotland.

3.3 Choice of branch of the profession

In each of the three different jurisdictions of the UK two branches of the legal profession—solicitors and barristers (solicitors and advocates in Scotland)—are recognised under the Establishment Directive. Thus there are six different "competent authorities", two for each jurisdiction.

Article 3 of the Establishment Directive preserves the separation of the professions of solicitor and barrister (or advocate) in all three jurisdictions in the UK, and also in the Republic of Ireland, so:

  • an Irish barrister may register in the UK – but only with the Bar Standards Board (England and Wales), the Bar Council of Northern Ireland or the Scottish Faculty of Advocates;
  • an English or Northern Irish barrister, or a Scottish advocate may register in the Irish Republic – but only with the Bar;
  • an Irish solicitor may register in the UK – but only with the SRA or the Law Society of Scotland or Northern Ireland;
  • a UK solicitor may register in the Irish Republic – but only with the Law Society of Ireland; and
  • within the UK and the Republic of Ireland, a lawyer may not be registered with one of the bodies regulating solicitors at the same time as one of the bodies regulating barristers or advocates.

Whichever branch of the profession you choose, you will (subject to certain limitations) enjoy the same rights of practice, and you will be subject to the same restrictions, as a member of that branch of the profession. This may affect your choice.

If you intend to register in E&W, you will probably wish to register with the SRA if you are intending to:

  • practise in partnership, or in a company or LLP, or to employ other lawyers – because the rules of the Bar Standards Board do not permit practice in that way in E&W;
  • have an office open to the public, or hold clients' money – because although the rules of the Bar Standards Board would permit you to accept instructions directly from the public, the service you can provide will be limited and you will not be able to conduct litigation or other matters in the way solicitors do.

On the other hand, you may wish to work in the manner of an English barrister - practising as a sole practitioner in "chambers" and taking one-off instructions from law firms to give advice or to appear as advocate.  If so you will probably wish to register with the Bar Standards Board.

If you are intending to practise in-house, or as an assistant or consultant lawyer in private practice, you will have a choice between registering with the SRA or the Bar Standards Board.  If your main interest is in advocacy you may find it advantageous to register with the Bar Standards Board, at least initially.  If you register initially with the SRA you would first need to acquire one of the SRA's higher courts qualifications in order to exercise a right of audience before the higher courts. But registration with the Bar Standards Board carries with it full rights of audience in the higher courts, and these rights will be "portable" if you later transfer your registration to the SRA and will be retained if you subsequently qualify as a solicitor.

3.4 Lawyers of the Irish Republic

If you are a barrister of the Irish Republic you cannot register with any of the bodies regulating solicitors in the UK. You can only register with the Bar Standards Board (in England and Wales), the Faculty of Advocates (in Scotland) or the Bar Council of Northern Ireland.

If you are a solicitor of the Irish Republic the converse is true – you cannot register with any of the bodies regulating barristers (advocates in Scotland), but must register with one of the bodies which regulate solicitors. However, instead of registering under the Establishment Directive you may prefer to apply for immediate admission as a solicitor of England and Wales or Northern Ireland, because you will not be required to sit any examination to do so.

4. How to register as an REL

For the regulations about the register and registration see the SRA Practising Regulations 2009.

4.1 A checklist

Before going any further, you should check the following:

Are you an avocat stagiaire? If so, you must complete your stage before the SRA can register you, and time you spend practising in the UK while completing your stage cannot be taken into account for the purpose of admission as a solicitor under Article 10 of the Establishment Directive.

Are you voluntarily suspended from practice in your home state (because, for example, you are practising outside your home state or as an in-house lawyer)? if so, you must take whatever steps are necessary to entitle you to practise in your home state before the SRA can register you, renew your registration, or count time you spend practising in the UK for the purpose of admission as a solicitor under Article 10 of the Establishment Directive.

Do you and your firm have appropriate professional indemnity insurance cover in place? If not, you will not be able to register with the SRA.

If you intend  to practise in E&W as a sole practitioner (see 6.1 below), are you "qualified to supervise" as required by rule 5.02 of the Solicitors' Code of Conduct 2007 (the Code) and have you obtained authorisation from the SRA as a "recognised sole practitioner" as required by rule 20.03 of the Code?

If you intend to practise in E&W as a principal or employee of a law firm, the firm will either need to be recognised by the SRA as a "recognised body" (see 6.2-6.5 below), or authorised to practise by another "approved regulator" (see 6.11 below), or else it will need to be a "foreign law firm" for the purposes of rule 13.11 so you can rely on the restricted rights to practise as an employee under that rule.

If your firm is to be a "recognised body", does it have at least one "manager" (partner in a partnership, member of an LLP, or director of  company) who is "qualified to supervise" as required by rule 5.02? 

Is your home state firm partly managed or owned by non-lawyers? Rule 14 of the Code puts a 25% limit on the participation by non-lawyers in the management and ownership of a law firm in England and Wales. Any non-lawyer principal will need to be approved by the SRA as a "manager" of a recognised body. If your firm cannot be brought within the requirements of rule 14, you will need to set up a separate firm for your practice in England and Wales before you can register with the SRA - we cannot register you unless you can comply with the Solicitors' Indemnity Insurance Rules.

Are you practising in or employed by a firm partly managed or owned by lawyers (such as US attorneys or civil law notaries) who are not members of professions listed in Article 1 of the Establishment Directive? If so, those lawyers will need to be registered as RFLs.

Are you employed by a law firm none of whose partners or directors is a solicitor or REL? If so, you will only be allowed to practise within the limits imposed under rule 13.11 of the Code. In particular, you will not be able to do work reserved to lawyers in England and Wales.

4.2 What you will need to send us

You must send us a completed application form, your application fee and your initial Compensation Fund contribution. You will also need to send us a certificate (or certificates) of attestation stating:

  • your date of admission,
  • whether there is a probationary or training period after admission – for instance, a stage,
  • that your name is on the register of the body providing the certificate and that you are entitled to practise,
  • that there are no disciplinary orders or pending proceedings against you (if there are, the body needs to provide details).

You need to give us a certificate of attestation for any Establishment Directive profession of which you are a member. The certificate should be issued by your regulatory body and must not be more than three months old. If it is not in English you will need to supply an English translation.

The form requires you to give details of your firm structure – for example, full details of all the other partners, including those based outside the UK, if you practise in a partnership. The SRA can only register you as an REL if it is satisfied that you are complying with the Solicitors' Indemnity Insurance Rules, or that the rules do not apply to you (for example, because you are an in-house lawyer), so we will need details of your insurance arrangements.

There is a right of appeal to the High Court against refusal or failure to deal with an application for registration as an REL.

5. Situations in which you cannot be registered as an REL

5.1  You cannot be registered as an REL if you are:

 - a member of a UK legal profession

  • For example, if you are a Finnish asianajaja and a solicitor of England and Wales you will not be required to register (and cannot register) because you are already qualified as a lawyer of E&W.
  • For example, if you are a German Rechtsanwalt and a Scottish solicitor you will not be required to register (and cannot register) because you are already qualified as a UK lawyer and the Directive does not apply to cross-border practice within the UK.

- completing a stage

  • For example, if you are a French avocat stagiaire you will not be required to register because "lawyer" in the context of the Establishment Directive does not include an avocat stagiaire.

5.2  You cannot be registered as an REL if you are:

- not a national of an Establishment Directive state

  • For example, if you are a French avocat of Algerian nationality you will not be required to register (and cannot register) because you are not a national of an Establishment Directive state.

- not a member of an Establishment Directive profession

  • For example, if you are a US attorney and a German citizen you will not be required to register (and cannot register) because you are not a lawyer of an Establishment Directive state.
  • If you are a member of a profession in an Establishment Directive state which is recognised by the SRA as a profession of lawyers but is not listed in the Establishment Directive – for example a Dutch notaris or a German Steuerberater – you will not be required to register (and cannot register) because you are not a member of an Establishment Directive profession.

- going to be based entirely outside the UK

  • For example, if you are an Italian avvocato based in Italy but practising in a partnership which has an office in the UK you will not be required to register because only lawyers with a physical presence in the UK have to register under the Establishment Directive.

6. Requirements you need to know in advance

In addition to the rules which deal with your conduct as a lawyer, some of the SRA's rules govern the ways in which you can practise in England and Wales, whether as a principal or as an employee, and you therefore need to be aware of these rules right from the start, and take steps to ensure that you can comply.

The Legal Services Act 2007 has brought about fundamental changes in the ways in which solicitors and RELs are regulated.  In particular, the Act has extended "firm-based regulation" to sole practices and partnerships.  The Act has also allowed for mixed practices of different types of English legal professionals—such as solicitors, barristers and legal executives—and for participation by up to 25% of non-lawyers.

There are now four ways in which a solicitor or REL may practise in England and Wales:

  • practice as a "recognised sole practitioner" or as the employee of a "recognised sole practitioner",
  • practice as a "manager" or employee of a "recognised body",
  • practice as "manager" or employee of an "authorised non-SRA firm", or
  • practice as an in-house lawyer.

The requirements in relation to each, are set out in 12.02(1) of the Code.  In particular, please note the new concept of a "manager".  In the case of a partnership, this means a partner or any person held out as a partner.  In the case of an LLP it means a member.  In the case of a company it means a director.

6.1 Practice as a sole practitioner - new provisions

On 1 July 2009 there was an important change for sole practitioners.  As from that date any solicitor or REL wishing to practise as a sole practitioner from an office in England and Wales must first obtain authorisation from the SRA as a "recognised sole practitioner".  Existing sole practitioners as of 1 July 2009, provided they were in compliance with basic regulatory requirements, will have been "passported" to recognised sole practitioner status.

For new sole practitioners, authorisation will depend on the lawyer's disciplinary record, etc., and on compliance with basic regulatory requirements such as:

  • being "qualified to supervise" – i.e. having completed 12 hours of training in management skills, and having been entitled to practise as a lawyer for at least 36 months within the last ten years;  and
  • being covered under the compulsory scheme for professional indemnity insurance to the extent of £2 million for any one claim.

Renewal of authorisation takes place at the same time as renewal of a solicitor's practising certificate or an REL's registration.

6.2 Practice through a partnership - new provisions

On 31 March 2009 a number of important changes were made to the way in which solicitors and/or RELs can practise through partnerships.  As from that date:

  • Any partnership of a solicitor or REL which intends to practise from an office in England and Wales must first obtain recognition from the SRA as a "recognised body" (or else it must obtain authorisation from another "approved regulator" – see below).  Existing partnerships as of 31 March 2009, provided they were in compliance with basic regulatory requirements, will have been "passported" to recognised body status.
  • For new partnerships, recognition will depend on the partners' disciplinary record, etc., and on compliance with basic regulatory requirements such as at least 75% lawyer ownership, at least one partner having 3 years' entitlement to practise as a lawyer, and the practice being covered by professional indemnity insurance.
  • Renewal of recognition takes place annually at the same time as renewal of solicitors' practising certificates and RELs' registration.
  • Solicitors and RELs can now practise in a partnership authorised by another approved regulator (such as the Council for Licensed Conveyancers), doing work of a type regulated by that regulator.
  • It is now possible for the first time for solicitors and/or RELs to practise in England and Wales in a partnership which has separate legal identity – provided that it is recognised as a "recognised body".  This allows practice in E&W through a Scottish general partnership, a Jersey limited liability partnership, or a partnership formed under the law of Norway, Delaware or California.
  • It is now possible for solicitors and/or RELs to practise in England and Wales in partnership with English lawyers other than solicitors—barristers, legal executives, notaries, licensed conveyancers, patent agents, trade mark agents and law costs draftsmen—provided the partnership is a recognised body (or is authorised by another approved regulator).
  • It is now possible for solicitors and/or RELs to practise in England and Wales with up to 25% non-lawyer partners approved by the SRA, in a partnership which is a recognised body (or to practise in partnership with non-lawyers in a partnership authorised by another approved regulator).

For the regulatory requirements for recognised bodies generally, see below.

6.3 Practice through a limited liability partnership - new provisions

Note that in the SRA's rules, and in this document, the term "LLP" is used to denote a UK limited liability partnership, which is exceptional in that it is a body corporate, being incorporated under the Limited Liability Partnerships Act 2000.  Before 31 March 2009 this was the only type of limited liability partnership which could be recognised by the SRA as a "recognised body" - and which had to be so recognised if it included any solicitor or REL and was practising in England and Wales.

As from 31 March 2009, a non-UK limited liability partnership, provided it is not a body corporate, can now be recognised by the SRA as a recognised body.  Indeed if it includes any solicitor or REL and is to practise in England and Wales it must be so recognised (unless it is authorised by another approved regulator - see below).  Such a non-UK limited liability partnership might have separate legal personality (like a Jersey or California limited liability partnership) or it might not (like a New York limited liability partnership).  In either case it is treated under the SRA's rules as a "partnership" and not as an "LLP".

On 31 March 2009 a number of important changes were made to the way in which solicitors and/or RELs can practise through a UK LLP.  As from that date:

  • Solicitors and RELs can now practise in a LLP authorised by another approved regulator (such as the Council for Licensed Conveyancers), doing work of a type regulated by that regulator.
  • It is now possible for solicitors and/or RELs to practise in England and Wales in an LLP with English lawyers other than solicitors - barristers, legal executives, notaries, licensed conveyancers, patent agents, trade mark agents and law costs draftsmen - provided the LLP is a recognised body (or is authorised by another approved regulator).
  • It is now possible for solicitors and/or RELs to practise in England and Wales in an LLP with up to 25% non-lawyer members approved by the SRA, provided the LLP is a recognised body (or to practise with non-lawyers in an LLP which is authorised by another approved regulator).

For the regulatory requirements for recognised bodies generally, see below.

6.4 Practice through a company - new provisions

Note that, to be recognised by the SRA as a "recognised body", a company must still be incorporated in the UK or in another Establishment Directive state.  For details see rule 14.03(1)(c).

On 31 March 2009 a number of important changes were made to the way in which solicitors and/or RELs can practise through a company.  As from that date:

  • Solicitors and RELs can now practise through a company authorised by another approved regulator (such as the Council for Licensed Conveyancers), doing work of a type regulated by that regulator.
  • It is now possible for solicitors and/or RELs to practise in England and Wales in a company together with English lawyers other than solicitors - barristers, legal executives, notaries, licensed conveyancers, patent agents, trade mark agents and law costs draftsmen – provided the company is a recognised body (or is authorised by another approved regulator).
  • It is now possible for solicitors and/or RELs to practise in England and Wales in a company with up to 25% non-lawyer directors approved by the SRA, provided the company is a recognised body (or to practise with non-lawyers in a company which is authorised by another approved regulator).

For the regulatory requirements for recognised bodies generally, see below.

6.5 The regulatory requirements for recognised bodies generally

 Rule 14 of the Code deals with practice through a recognised body – i.e. a partnership, company or LLP recognised by the SRA.  A recognised body must be at least 75% owned and managed by lawyers, according to the various criteria in rule 14.01(3).

At least one of the "managers" of a recognised body (the partners in a partnership, the members of an LLP, or the directors of a company) must be:

  • a solicitor;
  • an REL;  or
  • (in the case of a partnership or LLP) a body corporate which is a "legally qualified body" with at least one solicitor or REL "manager";  (a "legally qualified body" is a recognised body, an authorised non-SRA body with at least 75% lawyer ownership, or a European corporate practice – see definitions in rule 24.01).

Every "manager" of a recognised body must be:

  • a solicitor with a current practising certificate
  • any other lawyer of England and Wales authorised to practise as such;
  • an REL;
  • an RFL;
  • an "exempt European lawyer" (a European lawyer registered with the Bar Standards Board, or based outside England and Wales – see rule 24.01);
  • an individual approved by the SRA as a non-lawyer "manager";  or
  • (in the case of a partnership or LLP) a body corporate which is a "legally qualified body" (see rule 24.01).

For every recognised body there must be at least one "manager" who is "qualified to supervise" – i.e. he or she must have completed twelve hours of training in management skills, and must have been entitled to practise as a lawyer for at least 36 months within the last ten years.  For details see rule 5.02.

All recognised bodies must be covered under the compulsory scheme for professional indemnity insurance.  The required cover is £2 million for any one claim in the case of a partnership, an unlimited company or a nominee company.  It is £3 million in the case of an LLP, a limited company, or a partnership which has one or more limited companies as partners.

Setting up a one-person company

It is possible in E&W to practise through a one-person company.  People choose to do this for a number of different motives – principally tax or limiting personal liability.  the following are examples:

  • The solicitor or REL sets up his or her firm as a one-person company, as an alternative to trading as a sole practitioner.  The company has to be a recognised body, and must have professional indemnity cover of £3 million for any one claim.
  • The solicitor or REL wants to set up his or her firm as an LLP rather than as a sole practice.  An LLP needs two members.  This is achieved by the solicitor or REL being one of the members and the solicitor or REL setting up a one-person company to be the second member.  The LLP and the company must both be recognised bodies, and both must have professional indemnity cover of £3 million for any one claim - both can be covered under the same policy provided they both appear as separately insured.  The extra regulatory costs need to be considered.
  • Some lawyers form one-person companies in order for the companies (rather than the individual lawyers) to become partners in a partnership or members of an LLP. The SRA's rules allow this.  If the individual is a solicitor or REL, the one-person company must be a recognised body. If the lawyer is an "exempt European lawyer" based outside E&W, the one-person company may be a "European corporate practice" and therefore exempt from registration.  See rules 14.04(1)(f), 14.05(1)(f) of the Code and the definitions in rule 24.01.
  • On the other hand, an individual solicitor or REL may set up a one-person company solely in order to provide his or her services as a consultant or locum.  If this arrangement comes within the stringent requirements of paragraph (c)(iii) of the definition of "employee" in rule 24.01, so that the individual can be treated as an employee of the firm or organisation, there will be no need for the one-person company to be a recognised body.

Legal disciplinary practices

As a result of the Legal Services Act 2007, "legal disciplinary practices" (LDPs) are now permitted in England and Wales as from 31 March 2009.  Such practices (partnerships, LLPs or companies) have to comprise at least 75% "lawyers" and can have up to 25% non-lawyers – calculated according to the various criteria in rule 14.01(3):

"Lawyers" in this context are solicitors of England and Wales, RELs, "exempt European lawyers", RFLs, and members of the English professions of barristers, legal executives, notaries, licensed conveyancers, patent agents, trade mark agents and law costs draftsmen.

Non-lawyer participants must be individuals approved by the SRA as suitable to be "managers" of a recognised body.

An "exempt European lawyer" (i.e. exempt from registration with the SRA) is a member of an Establishment Directive profession who is either

  • registered with the Bar Standards Board; or
  • based entirely at an office or offices outside England and Wales,

and who is not a "lawyer of England and Wales".  See the definition of "exempt European lawyer" in rule 24.01.

An LDP can provide only those services which can properly be carried on by lawyers.

Alternative business structures

Under the Legal Services Act 2007 a further notable change is expected at some time in 2011 – namely the advent of "alternative business structures" (ABSs) for law firms.  This will allow:

  • non-lawyer participation of more than 25%;
  • up to 100% non-lawyer ownership, including ownership by a non-lawyer business; and
  • provision of a combination of lawyer type services and other services.

In the meantime, ABSs remain prohibited in England and Wales.

6.6 Name and notepaper

Before setting up a firm or opening an office in England and Wales you need to check the requirements about the firm's notepaper. Rule 7 of the Code governs all publicity for an REL, including the name of the REL's firm and the letterhead, fax heading, website and e-mails it uses for the practice of its offices in England and Wales.

In the case of a sole practitioner:

  • the general law requires that the name of the sole practitioner must appear on the letterhead;
  • the REL's name must be accompanied by the jurisdiction (local or national as appropriate) under whose professional title he or she is practising, and that title expressed in the official language of that jurisdiction, and a reference to the REL's registration – e.g. "Paul van den Hoek, advocaat (Brussels), registered European lawyer";
  • rule 7 requires the firm's letterhead and fax heading to show the words "regulated by the Solicitors Regulation Authority";
  • as from 1 January 2010 the firm's website and e-mails must show the words "regulated by the Solicitors Regulation Authority";  and
  • as from 1 January 2010 the firm's letterhead, fax heading, website and e-mails must include the name under which the firm is recognised by the SRA and the number allocated to it by the SRA - see rule 25.01(7)(c).

In the case of a partnership:

  • rule 7 requires the names of all partners to be listed on the firm's letterhead and fax heading – except that if there are more than 20 partners it is acceptable to state that a list of the partners is open to inspection at the firm's office.  The qualifications of each partner must be identified – see below.  It is not appropriate to list only resident partners or to include in the list of partners an assistant or consultant lawyer, or a deceased founder of the firm.  Such persons may be listed separately, if their status is made clear;
  • rule 7 requires the firm's letterhead and fax heading to show the words "regulated by the Solicitors Regulation Authority";
  • as from 1 October 2009 the firm's website and e-mails must show the words "regulated by the Solicitors Regulation Authority";  and
  • as from 1 October 2009 the firm's letterhead, fax heading, website and e-mails must include the name under which the firm is recognised by the SRA and the number allocated to it by the SRA – see rule 25.01(7)(a).

In the case of an LLP:

  • the general law requires the firm's letterhead, fax heading, website and e-mails to include the words "limited liability partnership" in full, to state that the LLP is registered in England and Wales (or in Scotland) and to give the address of the registered office;
  • rule 7 requires the names of all the members to be listed on the firm's letterhead and fax heading and identified as members – except that if the LLP is practising under its corporate name and has more than 20 members it is acceptable to state that a list of the members is open to inspection at the firm's office.  The qualifications of each member must be identified - see below;
  • rule 7 requires the firm's letterhead, fax heading, website and e-mails to include the name and number under which the LLP is registered at Companies House;
  • rule 7 requires the firm's letterhead and fax heading to show the words "regulated by the Solicitors Regulation Authority"; and
  • as from 1 October 2009 the firm's website and e-mails must show the words "regulated by the Solicitors Regulation Authority"- see rule 25.01(7)(b).

In the case of a company:

  • the general law requires the firm's letterhead, fax heading, website and e-mails to include that the company is registered in England and Wales (or in Scotland) and to give the address of the registered office - an appropriate equivalent statement must be made in respect of a company incorporated in an Establishment Directive state other than the UK;
  • rule 7 requires the names of all the directors to be listed on the firm's letterhead and fax heading and identified as directors – except that if the company has more than one director it is acceptable to state that a list of the directors is open to inspection at the firm's office.  The qualifications of each director must be identified – see below;
  • rule 7 requires the firm's letterhead, fax heading, website and e-mails to include the name and number under which the company is registered at Companies House;
  • rule 7 requires the firm's letterhead and fax heading to show the words "regulated by the Solicitors Regulation Authority"; and
  • as from 1 October 2009 the firm's website and e-mails must show the words "regulated by the Solicitors Regulation Authority"- see rule 25.01(7)(b).

Where the partners, members or directors are named on a firm's letterhead or fax heading, or displayed in a list at the firm's office;

  • the name of an REL, or any other lawyer or notary of an Establishment Directive state other than the UK, must be accompanied by the jurisdiction (local or national as appropriate) under whose professional title he or she is practising, and that title expressed in the official language of that jurisdiction, and (if an REL) a reference to the REL's registration – e.g. "Paul van den Hoek, advocaat (Brussels), registered European lawyer";
  • the name of a solicitor must be designated as such;
  • the name of any other lawyer of England and Wales must be accompanied by his or her professional qualification;
  • the name of any RFL not included above must be accompanied by his or her professional qualification and the country or jurisdiction of that qualification – e.g. "John Smith, US attorney";
  • the name of any non-lawyer must be designated as a "non-lawyer";
  • the name of any body corporate must be accompanied by an explanation of its nature if this is not clear from the name itself.

There is a general prohibition on misleading publicity. It would be misleading (and therefore a breach of rule 7),as well as being a criminal offence in England and Wales, for a firm to use a name or description which includes the word "solicitor(s)" if none of the partners or directors (or members in the case of an LLP) is a solicitor of England and Wales.

6.7 Accounts and accountants' reports

The Solicitors' Accounts Rules 1998 lay down detailed requirements for handling client money, keeping accounting records, and delivering annual accountant's reports. Amongst other requirements your firm will need to have systems to ensure that:

  • all money held on behalf of clients, third parties or trusts ("client money") is kept in special client accounts in banks or building societies in England and Wales, separate from the firm's own money;
  • only a solicitor, REL, legal executive or licensed conveyancer, or a "manager" of the firm, can authorise withdrawals from a client account, and there must be a system in place to ensure that any such person has an appropriate understanding of the rules;
  • accounting records distinguish client money from office money,
  • records, bank statements and paid cheques or digital images of them, are kept for a prescribed time and are available for inspection by the SRA.

In order to comply with the Accounts Rules a firm will need to have an accounting system—either manual or computerised—which is compatible with the rules. Before setting up your accounting procedures, it may be helpful to get advice from a firm of accountants who prepare accountant's reports for solicitors' firms of similar size to your own firm.

If you or your firm (or any manager or employee of the firm) holds or receives client money your firm will have to deliver an annual accountant's report to the SRA and you will need to engage a registered auditor or firm of registered auditors to prepare the report.  Note that money held on account of costs is treated as client money under the Accounts Rules.

6.8 Financial services

If your firm is going to provide financial services in or into the UK in the course of legal practice without obtaining authorisation from the Financial Services Authority, the work done must stay within the limits laid down in the Solicitors' Financial Services (Scope) Rules 2001. If your firm is likely to step outside these limits and provide mainstream financial services, it must first obtain authorisation from the Financial Services Authority.

6.9 Professional indemnity insurance

Under the Solicitors' Indemnity Insurance Rules an REL's firm in private practice must either have "qualifying insurance" or a written exemption from the SRA.

For qualifying insurance, the insurer must be on the SRA's list of "qualifying insurers", and the policy must meet minimum terms and conditions laid down in the rules. The minimum cover for a sole practitioner, a partnership, an unlimited company or a nominee company is £2,000,000 for any one claim, and for an LLP or a limited company (except for a nominee company) it is £3,000,000 for any one claim.

If your firm has professional indemnity cover for its practice in E&W under your home state rules the SRA may grant you a written exemption if you apply. Full exemption will only be granted if your firm's existing cover is in all respects equivalent in conditions and extent to the cover which would be provided by "qualifying insurance". If the cover is only partially equivalent, partial exemption may be granted, and your firm would then have to obtain a difference in conditions policy from a "qualifying insurer" to bridge the gap. See Appendix 3 to the Indemnity Insurance Rules.

6.10 Money laundering reporting requirements

Under rule 5 of the Code your firm must have appropriate systems in place to meet the requirements of UK law in relation to money laundering. The Law Society has produced a practice note to assist in understanding and meeting those requirements – see the practice note "Anti-money laundering".

6.11 Practice in an authorised non-SRA firm

Following changes made by the Legal Services Act 2007, solicitors and RELs now have the option of practising as a principal or employee in an "authorised non-SRA firm" – i.e. a firm authorised by one of the other "approved regulators" for legal services.  This might, for instance, be a firm authorised by the Council for Licensed Conveyancers, or a firm authorised by the Intellectual Property Regulation Board.

6.12 Practice as an in-house lawyer

 Article 8 of the Establishment Directive allows a lawyer registered under the Directive to practise as an employee to the extent that host state lawyers can do so.

In-house practice includes practice as an employee in any firm or organisation with no solicitor or REL principals – in commerce, industry, the public service, law centres, trade unions, firms of non-lawyer professionals, or foreign law firms.

In-house practice may not be allowed under the rules of your home state. However, solicitors are allowed to practise in-house, so once you are registered with the SRA as an REL you will be entitled under article 8 of the Establishment Directive to do so. We will confirm the position as we see it to your home bar if necessary. However not all bars accept our interpretation of article 8, and some bars may apply their own ban on in-house practice to your practice in the UK.

If you practise as an in-house lawyer you must be registered as an REL, and employment in-house can be counted for the purpose of seeking admission to the solicitors' profession under article 10(1) or (3) of the Establishment Directive.

Under rule 12.02(1)(e) of the Code an in-house REL is, in general, allowed to work only for the employer, and not for the employer's clients or customers. However there are important exceptions, and they are set out in rule 13. For example:

  • an REL employed by a law centre, a trade union, an insurance company or a foreign law firm may act for a wider range of clients, subject to specified conditions; and
  • an REL employed in commerce or industry may do work for other companies in the group and, in limited circumstances, for directors and fellow employees.
  • an REL in in-house practice may do pro bono work for the public, subject to specified conditions.

Under rule 7.07(4), if the REL's name appears on an organisation's letterhead as an in-house lawyer, the name must be accompanied by the jurisdiction (local or national as appropriate) under whose professional title he or she is practising, and that title expressed in the official language of that jurisdiction, and a reference to the REL's registration – e.g. "Paul van den Hoek, advocaat (Brussels), registered European lawyer registered with the Solicitors Regulation Authority";

6.13 Practice in Scotland or Northern Ireland

 Rule 15 of the Code applies to the practice of an REL from offices in Scotland or Northern Ireland. The rule applies, modifies or disapplies other rules in relation to an REL's practice in Scotland or Northern Ireland. If you are a "manager" or owner of a firm which has offices in London and Edinburgh you will, for our purposes, be practising from an office in Scotland as well as from an office in England, even if you are physically based at the London office and never go to Scotland.

6.14 Separate business

 Rule 21 of the Code prohibits you, if you have a legal practice, from providing "core" legal services other than through a legal practice. The Code also lays down safeguards to make sure clients understand the situation when an REL or solicitor provides other "lawyer-like" services through a business which is not regulated by the SRA.

7. Work you can do when registered with the SRA

7.1 The range of a solicitor's activities

The practice of a solicitor of England and Wales can include the following activities:

  • court work (litigation, advocacy and drafting court documents) in England and Wales;
  • conveyancing work and probate applications in England and Wales;
  • drafting trust deeds in England and Wales;
  • immigration and representation and immigration tribunal work anywhere in the UK;
  • financial services anywhere in the UK provided that either the work remains within the limits set by the Solicitors' Financial Services (Scope) Rules 2001;  or else the firm is authorised by the Financial Services Authority;
  • administer oaths and declarations in England and Wales, and use the title "Commissioner for Oaths";
  • legal advice and general legal services;  and
  • business services customarily provided by solicitors.

If you are registered with the SRA as an REL you will have broadly the same practice rights as a solicitor and will be subject to broadly the same conditions, even if some of the services solicitors provide are not normally provided by lawyers of your home state.

However, certain restrictions will apply in relation to your conduct of litigation and your exercise of rights of audience, and some RELs are not allowed to do certain conveyancing work or probate applications.

Litigation and advocacy

In England and Wales, litigation and advocacy services are reserved to lawyers. The reserved services in relation to litigation and advocacy are:

  • drawing documents for the court;
  • going on the court record and conducting the client's case; and
  • advocacy before the court.

If you are registered with the SRA, you can appear as an advocate in those courts and cases in which all solicitors can exercise a right of audience, and you can acquire extended rights of audience by obtaining one of the SRA's higher courts qualifications. Barristers have rights of audience in all courts, and if you have been registered with the Bar Council you will keep rights of audience in all courts even after transferring your registration to the SRA.

If you are registered with the SRA (as an REL) you will be able to provide these services, but under regulation 11 in the Establishment Regulations you must act "in conjunction with" – that is, must be instructed together with – a solicitor and/or barrister who is entitled to do that particular work. The role of the solicitor or barrister is not to supervise you, or to take responsibility for your work, but to be able to assist the court in the event of a problem arising. The solicitor or barrister may be from your own firm.

Conveyancing and probate

In E&W, drawing certain instruments in conveyancing and probate is reserved to lawyers.  Under regulations 12 and 13 of the Establishment Regulations only RELs who are lawyers of certain states can do such work:

You will be able to do conveyancing work which is reserved to lawyers if you are registered with the SRA and qualified in one of the following states:

  • Cyprus,
  • the Czech Republic,
  • Denmark,
  • Finland,
  • Hungary,
  • Iceland,
  • the Irish Republic,
  • Liechtenstein,
  • Norway,
  • Slovakia,
  • Sweden.

You will be able to do probate work which is reserved to lawyers if you are registered with the SRA and qualified in one of the following states:

  • Austria,
  • Cyprus,
  • Denmark,
  • Finland,
  • Germany,
  • Iceland,
  • the Irish Republic,
  • Liechtenstein,
  • Norway,
  • Slovakia,
  • Sweden.

8. Admission to a host state legal profession

After practising for 3 years in the UK you may be entitled to apply for entry to one of the Establishment Directive professions of the UK under Article 10 of the Establishment Directive without having to sit an examination. This is not an absolute right. If you wish to become a solicitor of E&W you must be registered with the SRA when you apply, and you must have "effectively and regularly" practised UK law (which includes Community law) in the UK for three years (under Article 10.1), or for part of a three-year period of practice in the UK (under Article 10.3).

"Effectively and regularly" means without any interruption other than that resulting from the events of everyday life. Normally you would need to have been registered during those three years, but time spent in the UK before the Establishment Directive applied to you (for example before your home state joined the EU) will count, and so will time spent when you were registered under the Directive with another UK regulatory body.

"Effectively and regularly" may be difficult to interpret if your activity has been partly in UK law and partly, say, in the law of your home state.  A reasonable interpretation might be that during the three years under Article 10.1, or the lesser period under Article 10.3, a substantial proportion of your practice would have to have been in UK law (including Community law).

You can also become a solicitor by passing the Qualified Lawyers Transfer Test. A failed attempt to take the test cannot prejudice your rights under Article 10.1 or 10.3. If you are a solicitor of the Irish Republic you may apply for admission without the need to take the test. 

8.1 Regulatory issues on being admitted as a solicitor

When an REL is admitted as a solicitor (whether under Article 10 of the Establishment Directive or under the Qualified Lawyers Transfer Regulations, or by any other route), registration as an REL is cancelled. Note that if the former REL continues to have a separate practice in the UK as a lawyer of his or her home state, the rules and regulatory regime which apply to solicitors will continue to apply to that practice just as they did when the lawyer was an REL – see regulation 36(3) [link]of the Establishment Regulations.

Assuming that you are an REL and currently in practice as a lawyer of an Establishment Directive state, and you are thinking of applying to be admitted as a solicitor, you will need to sort out certain regulatory issues before deciding to go ahead:

  • You will need to ensure that the SRA will issue you with a practising certificate immediately on admission - in order to stay within the law, you must have a practising certificate on the day you are admitted.
  • Remember that if you continue to have a separate practice in the UK as a lawyer of your home state, the rules and regulatory regime which apply to solicitors will continue to apply to that practice just as they did when you were an REL - see above.
  • Check your firm's indemnity position.  If your firm currently has an exemption under Appendix 3 of the Solicitors' Indemnity Insurance Rules, check whether this can continue after you become a solicitor.  For example, the exemption will cease at the end of the current year's cover if your firm has full exemption but, following your admission as a solicitor, more than 25% of the "principals" will be solicitors.  Or if your firm has full or partial exemption but, following your admission as a solicitor, none of the "principals" will be an REL.  In either case your firm would need to make alternative arrangements to stay within the rules.
  • If you or your firm has a branch office or a separate practice in your home state (or elsewhere outside the UK), you will need to decide whether to use your new title "solicitor" in connection with that office/practice.  If you decide to do so, you will need  make sure that that you can comply with the Code as applied by rule 15– because you will be practising as a solicitor in that state if you are held out as such.

Note also that anyone applying for admission as a solicitor, including an REL, must obtain a criminal record check from the Criminal Records Bureau (CRB).  You should obtain the appropriate form from the SRA's contact centre. The CRB check includes details of all current and spent convictions, police cautions, reprimands and final warnings held on the Police National Computer in England and Wales. The SRA will also make use of overseas criminal records information services where appropriate.

9. Solicitor registering in another Establishment Directive State

9.1 General requirements

A solicitor of England and Wales registering under the Establishment Directive in another Establishment Directive state will be practising as a solicitor, and must hold and maintain a practising certificate.  He or she will be subject to rule 15 (overseas practice) and rule 16 (European cross-border practice) of the Code.

9.2 Professional title

 Article 4 of the Establishment Directive requires that a solicitor of England and Wales registered under the Directive in another Establishment Directive state shall practise under the title "solicitor" expressed in English (or in Welsh).

Host state rules or regulations may also require the solicitor to indicate:

  • the professional body of which he or she is a member (i.e. "solicitor, member of the Law Society of England and Wales" – in which case the solicitor must indeed be a member of the Law Society);  or
  • the judicial authority before which he or she is entitled to practise (i.e. "solicitor of the Supreme Court of England and Wales" until 30 September 2009;  and "solicitor of the Senior Courts of England and Wales" as from 1 October 2009).

Host state rules or regulations may also require the solicitor to include a reference to his or her registration with the competent authority (which may be the local bar) in the host state.

9.3 Registration in the Irish Republic

 Article 3.3 of the Establishment Directive provides that a solicitor of E&W who registers in the Irish Republic under the Directive can only register with the Law Society of Ireland and not with the Irish Bar Council.

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