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Legal Services Act - glossary of terms

Last updated 21 October 2009

ABS
see alternative business structures below
alternative business structures (ABSs)
new types of law firm which will be permitted from about 2011, such as a firm with more than 25 per cent non-lawyer managers, or a company taken over by a non-lawyer enterprise, or a company floated on the stock exchange, or a firm which provides both solicitor services and non-legal services; an alternative business structure will need to be licensed by a licensing authority as a licensed body; note that the Clementi Report classified LDPs as a type of ABS, but we tend to use the term to exclude LDPs
approved regulator
a regulatory body approved under the Act to authorise individuals or firms to undertake reserved legal activities; the approved regulators named in the Act are the Law Society (which will act through its independent regulatory body, the SRA), the Bar Council, the Master of Faculties, the Institute of Legal Executives, the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Institute of Trade Mark Attorneys and the Association of Law Costs Draftsmen
authorised non-SRA firm
a sole practitioner, partnership or company authorised to practise by one of the other approved regulators.
authorised person
an individual or firm who or which is authorised by an approved regulator to undertake a reserved legal activity; an authorised person could be
business structure
the way a law firm is structured:
Clementi Report
Sir David Clementi's Review of the regulatory framework for legal services in England and Wales in which he recommended
Compensation Fund
the Solicitors' Compensation Fund, which includes all firms covered by the SRA
cost of regulation
the cost of regulation will include the running costs of the SRA, plus that share of the start-up and running costs of the LSB and the OLC which is levied on the SRA
European corporate practice
a lawyers' practice which is a body incorporated in an Establishment Directive state, or a partnership with separate legal identity formed under the law of an Establishment Directive state:
  • (a) which has an office in an Establishment Directive state but does not have an office in England and Wales;
  • (b) whose ultimate beneficial owners include at least one individual who is not a lawyer of England and Wales but is, and is entitled to practise as, a lawyer of an Establishment Directive profession;
  • (c) whose managers include at least one such individual, or at least one body corporate whose managers include at least one such individual;
  • (d) 75 percent of whose ultimate beneficial ownership is in the hands of individuals who are, and are entitled to practise as, lawyers of Establishment Directive professions, lawyers of England and Wales, and/or RFLs; and
  • (e) 75 percent of whose managers comprise such individuals, and/or bodies corporate 75 percent of whose managers comprise such individuals
European lawyer
a lawyer (as narrowly defined in European Directives) of an EU or EEA state or Switzerland
exempt European lawyer
a member of an Establishment Directive profession
  • (a) registered with the Bar Standards Board; or
  • (b) based entirely at an office or offices outside England and Wales,

who is not a lawyer of England and Wales (whether entitled to practise as such or not)

external investor
an individual non-lawyer, or an enterprise owned by non-lawyers, who or which is the owner or part owner of an ABS?see also outside participation
fee collection
the collection of practising certificate fees for solicitors, registration fees for RELs and RFLs, and recognition fees for recognised bodies and recognised sole practitioners?such fees must cover the cost of regulation and may also make a contribution to public interest functions of the Law Society such as law reform, pro bono activities, human rights and international relations
fee structure
the balance as between fees levied on individuals and fees levied on firms, as between fees for firms of different size, business structure or turnover, and possibly as between firms in different fields of legal practice
firm
includes a sole practice, partnership, LLP or company through which a solicitor or REL practises (other than in-house)
firm-based regulation
the SRA now has direct powers to regulate all firms, whether they are bodies corporate (LLPs or companies) or partnerships (as recognised bodies), or the practices of sole practitioners (as recognised sole practitioners); the SRA's rules apply not only to solicitors, but to any firm regulated by the SRA and to all other lawyers and non-lawyers who are managers or employees in the firm
front-line regulator
an approved regulator?the term front-line regulator is used to contrast with the LSB, which will be the over-arching regulator for legal services
head or main office
the "head or main office" is the office address that we will hold in our records as the main address for your firm
incorporated practice
a solicitors' (or RELs') firm, including an LDP, which is an LLP or company
information sharing
the extent to which a regulatory body such as the SRA should, or is permitted to, share information with other regulators, the police, etc.
in-house lawyer
a solicitor employed by an employer that is not a solicitor's firm or an authorised non-SRA firm (in commerce or industry, in central or local government, in the not-for-profit sector, or in a trade union or other association) acts only for the employer, subject to limited exceptions which allow, for instance, a law centre solicitor to act for members of the public; "pure" in-house work, where the solicitor cannot be said to be working for the public or a section of the public, is not affected by the Act; most organisations whose solicitors currently act for sections of the public?such as law centres or insurance companies?will eventually need to be licensed as ABSs under the Act
lawyer
the Act gives "lawyer" a wide meaning as including any individual who is an authorised person or European lawyer; but note that lawyers of other jurisdictions, European lawyers and foreign lawyers include only lawyers in the more narrow and traditional sense
lawyer of another jurisdiction
a lawyer of a jurisdiction other than England and Wales
LDPs
see legal disciplinary practices
legal disciplinary practices (LDPs)
LDPs are a new type of firm which the SRA is permitted to regulate comprising solicitors and/or RELs, with or without RFLs and or exempt European lawyers, but which also includes one or more other lawyers and/or up to 25 per cent non-lawyers; there can be no outside participation in an LDP
the provision of legal services through a professional practice, commercial enterprise or not-for-profit organisation
the legal and paralegal professions, taken together, of all individuals who are authorised persons
services of a type provided by solicitors, lawyers of other jurisdictions or notaries
the Act implements the proposals in the Clementi Report; in addition, it allows firms to choose their regulator within limits imposed by the scope of each regulator's authority. (Full text of the Act)
Legal Services Board (LSB)
an independent body established under the Act to be the over-arching regulator for the legal profession as a whole
legal services body
a partnership, LLP or company whose structure qualifies it to be recognised by the SRA as a recognised body; a legal services body must either be the type of firm traditionally permitted by the SRA, or it must be an LDP; it must have at least one manager who or which is a solicitor, REL or qualifying body, cannot have more than 25 per cent non-lawyer managers and cannot have any outside participation; within the constraints of the Act and the relevant rules, a legal services body may comprise individuals or bodies corporate or both
legally qualified body
for the purposes of the rules in the Code and for the purposes of section 9A(6)(h) and (6C) of the Administration of Justice Act 1985 means a body which would meet the services requirement in rule 14.01(1) and is:
  • (a) a recognised body;
  • (b) an authorised non-SRA firm of which individuals who are, and are entitled to practise as, lawyers of England and Wales, lawyers of Establishment Directive professions or RFLs make up at least 75% of the ultimate beneficial ownership; or
  • (c) a European corporate practice
licensable body
a partnership, LLP or company with participation by non-authorised persons; a licensable body will not be able to undertake reserved legal activities without a licence from a licensing authority; all ABSs are licensable bodies; once the licensing scheme for licensable bodies is up and running, those LDPs with non-lawyer participation will also be licensable bodies
licensed body
a licensable body which has been granted a licence by a licensing authority to undertake reserved legal activities
licensing authority
an approved regulator which has been granted by the LSB the additional power to license licensable bodies to undertake reserved legal activities
licensing rules
the rules under which, from about 2011, a licensing authority will license licensable bodies to undertake reserved legal activities and which will lay down the conditions under which a licensed body will be permitted to provide legal services generally
limited liability partnership (LLP)
a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000
LLP
see limited liability partnership
LSB
see Legal Services Board
manager
a manager of a firm is a
  • (a) partner in a partnership
  • (b) member of an LLP, or
  • (c) director of a company.
MDPs
see multidisciplinary practices
multidisciplinary practices
any firm which involves solicitors together with other lawyers or non-lawyers either as managers or as owners has, in the past, been regarded as an MDP; however, we tend now to classify such firms as LDPs or as ABSs, and to regard as MDPs only those ABSs that provide both solicitor services and non-legal services
new forms of practice
new forms of business structure permitted for solicitors' practices under the Act, i.e. LDPs, permitted from 31 March 2009, and ABSs, which will be permitted from about 2011
non-authorised person
participation by a non-authorised person will make a firm a licensable body under the Act; "non-authorised person" has a very complicated definition?basically a non-authorised person is an individual who is neither an authorised person nor a European lawyer, or a body which is neither an authorised person nor entirely owned and managed by authorised persons, European lawyers and/or bodies corporate that are 90 per cent owned and managed by authorised persons and/or European lawyers
non-lawyers
individuals who are not authorised persons or lawyers of other jurisdictions; also bodies corporate owned by such individual non-lawyers; see non-authorised person
services of a type not provided by solicitors or notaries
non-registered European lawyer
the former description of a European lawyer participating in a legal practice together with solicitors or RELs but exempt from registration with the SRA because based outside England and Wales?now known as exempt European lawyer
Office for Legal Complaints (OLC)
the OLC will take over all complaints handling against lawyers, at present handled by the complaints services of the various professional bodies; the OLC will not deal with alleged professional misconduct, which will continue to be dealt with by the front-line regulators, and, in the case of solicitors, by the SRA and the Solicitors' Disciplinary Tribunal
OLC
see Office for Legal Complaints
other lawyers
types of lawyer not authorised by the SRA?i.e. barristers, notaries, legal executives, licensed conveyancers, patent agents, trade mark agents or law costs draftsmen
other office
any office of a firm other than the head or main office
outside participation
any ownership or part ownership of a law firm by non-lawyers who are not managers of the firm; see also external investor
overseas practice
the legal practice of a sole practitioner, partnership, LLP or company carried on entirely from an office or offices outside England and Wales
owner
in relation to a body, means a person with any ownership interest in the body
partnership
under the SRA's rules, any unincorporated practice in which persons are or are held out as partners
passporting
the process by which

without the firms having to make an application or pay a fee

practising certificate exercise
the annual exercise whereby practising certificates are renewed, information collected and practising certificate fees received
principles of good regulation
the principles of good regulation laid down by the Government's Better Regulation Task Force, which are largely reproduced in section 3 of the Act as "the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed"
qualifying body
a legal services body must have at least one manager who or which is a solicitor, REL or qualifying body; a qualifying body must have at least one manager who is a solicitor or REL, at least 75 per cent of its managers must be individual authorised persons or European lawyers, and any non-lawyer managers must be individuals approved by the SRA as suitable to be managers of a recognised body; there can be no outside participation in a qualifying body
RB1
application for recognition of a new partnership as a recognised body
RB2
application for recognition of a new limited liability partnership as a recognised body
RB3
application for recognition of a new company as a recognised body
recognised body
a partnership, LLP or company recognised by the SRA under section 9 of the Administration of Justice Act 1985 as suitable for the provision of legal services; see also recognised body regime
recognised body regime
until 30 March 2009, the SRA had the power to recognise as a recognised body an LLP or a company wholly owned and managed by solicitors, European lawyers and/or RFLs, thus permitting the body to carry on a legal practice; the SRA can now recognise partnerships, as well as LLPs and companies, as recognised bodies; the SRA hopes that, from about 2011, it will have the additional powers it will need so as to be able recognise ABSs as recognised bodies
recognised sole practitioner
the designation for a solicitor who is authorised (by endorsement of the solicitor's practising certificate) to practise as a sole practitioner; and for an REL who is authorised (by endorsement of the REL's registration) to practise as a sole practitioner; recognised sole practitioner is a parallel term to recognised body; the scheme for authorisation of sole practitioners commenced on 1 July 2009
registered European lawyer (REL)
a European lawyer registered with the SRA under regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (S.I. 2000 No. 1119) to permit practice in the UK; an REL is an authorised person under the Act
registered foreign lawyer (RFL)
a lawyer of another jurisdiction registered with the SRA under section 89 of the Courts and Legal Services Act 1990 to permit them to practise as a manager of a recognised body; an RFL is an authorised person under the Act; but, even if that is not so, RFLs' existing practice rights are preserved under the Act
regulated community
all individuals and firms authorised to practise by one or other of the approved regulators, or subject to the rules of an approved regulator
REL
see registered European lawyer
to qualify as a legal services body, a firm's services must be confined to relevant legal services; these are solicitor services and, if the firm includes a manager or employee who is a notary, notarial services
reserved legal activities
specified in section 12 of the Act as the exercise of a right of audience, the conduct of litigation, reserved instrument activities, probate activities, notarial activities and the administration of oaths?all these terms are defined in detail in Schedule 2 to the Act
reserved legal services
at present, certain legal services (litigation, advocacy, conveyancing, probate, etc.) are reserved to solicitors, barristers and certain other persons under the Solicitors Act 1974 and/or the Courts and Legal Services Act 1990; once the LSB is up and running (probably about 2010), such activities, as well as work reserved to notaries and some work reserved to certain persons under the Immigration and Asylum Act 1999, will be re-defined under the Act, re-designated as reserved legal activities and reserved to various categories of authorised person
RFL
see registered foreign lawyer
risk-based approach
an approach to the exercise of regulatory functions whereby regulatory activities are proportionate to the risks posed to clients, third parties or the public interest by particular firms, individuals or fields of practice, and are targeted accordingly?see also principles of good regulation; in order to be able to target regulatory activities effectively, the SRA may need to collect additional information?for instance, about the size and range of firms' practices
shareowner
  • (a) a member of a recognised body which is a company with a share capital, who owns a share in the body; or
  • (b) a person who is not a member of a company with a share capital, but owns a share in the body, which is held by a member as nominee
sole practitioner
a solicitor or REL practising as a sole practitioner?see also recognised sole practitioner
sole solicitor
a solicitor practising as a sole practitioner?see also recognised sole practitioner
sole solicitor endorsement
the process (endorsement of the solicitor's practising certificate) by which the SRA authorises a solicitor to practise as a sole practitioner?see also recognised sole practitioner
solicitor services
under the Act, these are defined as professional services such as are provided by individuals practising as solicitors or lawyers of other jurisdictions
Solicitors Regulation Authority (SRA)
the independent regulatory body of the Law Society?the SRA carries out all regulatory functions assigned to the Law Society under the Act
SRA
see Solicitors Regulation Authority above