Getting your firm authorised by the SRA: A step-by-step guide

If you're a prospective recognised body, ABS or sole practitioner looking to get authorised by the SRA, this webinar, held on 18 June 2013, offers you valuable information. The presentation covers the SRA's new firm-based authorisation team's approach, aimed at streamlining our response to applications, advice to new firms on the application process, and what the SRA looks for in role holders to ensure that clients and the general public have confidence those engaged in delivering legal services are meeting high standards.

Webinar recording

View this video on YouTube


Questions and answers

What application form do I need?

A. All applications now use the same form.

What fee do I pay?

A. This will depend on your application type, the time of year you apply and whether or not you will hold client money. Read about the SRA fee structure.

Is our firm a successor for the purposes of the fee?

A. This will depend on the facts. Please refer to the fee policy and the SRA Glossary which provides a definition of a successor firm and how to calculate the fee.

We are changing our legal status, i.e. a partnership to an LLP, and our COLP and COFA will remain the same—do they need to go through the authorisation process again?

A. Yes—the approval of roles is not transferrable. The COLP and COFA will always need to complete an individual form as a formal decision to approve them in the new entity will still be required.

However, if they have been approved in the role within the last 12 months, they will not need to go through new criminal checks unless new events are disclosed in the individual forms which have taken place after approval was granted.

When we decide whether a COLP and COFA is suitable to fulfil these roles, we will take into account that they are already approved; whether there are any new issues which may have been declared which may lead to us carrying out further external checks; and any necessary internal checks.

We are completing a manager change. What is deemed approved or non-deemed? Do I need an NM1 (now "Advance Notification" form), NM2 or NM3?

A. Rule 13.2 of SRA Authorisation Rules 2011 sets out those individuals who are deemed approved. If you do not fall within this criteria, you will need to obtain specific approval by submitting an NM2.

Can we request a pre-application meeting?

A. Yes, we will meet where necessary and appropriate. We can deal with queries by email and telephone in the first instance.

What are the time limits for consideration of the application? Why does it take so long—firms need significant support to complete them and are frustrated at their length.

A. Six months for authorised bodies and 90 days for recognised sole practitioner applications—both from receipt of the application. We have recently changed the application form as a part of our ongoing commitment to streamline the process. Read our advice and guidance on the authorisation process.

Can the applications be supplied in different format such as an editable pdf?

Microsoft Windows users: The forms must be completed and saved using Adobe Reader. We recommend that you download and install the latest version of Adobe Reader from http://get.adobe.com/reader/.

Mac OS users: The forms cannot be completed and saved using Adobe Reader for Mac OS. Instead, please use the Mac OS native PDF viewer (Preview) to complete the form. Before you send the form to us, you must use the file "Print" menu in Preview to create a new PDF (File > Print > PDF > Save as PDF), which you can send to us by email. We cannot accept PDFs that have simply been saved in Preview—you must use the "Print" menu in Preview to create a PDF that we can process.

All users: Please include in the name of each file you send us both the name of your firm and type of form (i.e. applicant firm, individual, corporate). For example, files sent to us by an applicant firm Smith LLP would named as follows: smith-llp-applicant-firm.pdf, smith-llp-individual.pdf and smith-llp-corporate.pdf.

Is the authorisation backdated once granted?

A. No, authorisation can never be backdated—it is therefore important that you do not begin trading from the applicant firm until you have received authorisation.

Can I send indemnity details at a later date after submitting the application—because if authorisation is not granted, this is an unnecessary cost.

A. You do not need to take out indemnity insurance in advance of us making a decision on your application at present. However, we do expect to provide us with a formal quote for the correct level of professional indemnity insurance when you apply and, if necessary, provide an updated quote immediately prior to our making a decision if the original quote has expired.

We will also ask you to provide evidence to us that you have taken out the insurance from the date of authorisation very shortly after authorisation takes effect.

How elaborate does the business plan need to be?

A. It needs to cover practical things such as premises, files, etc. We are not trying to constrain business ideas and innovation, but we need to be able to ascertain from the business plan how the firm has assessed its financial viability going forward.

Will applicants have to send documents in support of their application?

A. Authorisation is not a tick-box exercise and therefore it will depend on the individual application—if there is a particular document an applicant feels would be useful to submit in support of their application, this is perfectly acceptable.

Is there any help available to complete the referrals/sharing fees section of the application form?

A. The guidance notes to the firm based application form provide information on each section to assist the applicant. Additional help can be found in Chapters 6 and 9 of the Code of Conduct relating to client care and fee sharing and referrals respectively.

Section 4 of the application form talks about financial planning information. What financial assessment does the SRA carry out based on the information supplied? What if firms are overly optimistic about their finances?

A. We ask firms to provide their best estimates—but do not look at this information in isolation. We take a global view of the application in line with all the information provided e.g. area of work, number of fee earners etc and from that we can judge where firms are being overly optimistic about their financial position.

What does the research stage mean? Does the SRA have secret lists and tools that they use?

A. We don't use secret lists or tools, and aim to be as transparent as possible about how we look at applications. This is why we include our Risk Tool in the authorisation application pack we send out to firms. We check regulatory history and carry out Disclosure and Barring Service (DBS) checks (formerly known as Criminal Record Bureau (CRB) checks). Atlantic Data Ltd do this on our behalf by sending a link to the applicant once we've received the application form.

How easy is it to satisfy the criteria for the role of a COLP?

A.The Compliance Officer for Legal Practice (COLP) must be fit and proper to undertake their role as they will play a key role in the SRA's regime of outcomes focused regulation. Read our guide to the duties and responsibilities as a compliance officer.

Where do I find guidance on who can be a manager or a share owner or who can complete certain roles e.g. complaints handler.

A. Part 4 of the SRA Authorisation Rules 2011

Rules 13 and 14 of the SRA Practice Framework Rules 2011; and also the SRA Glossary also provides the definitions of those roles.

There is also helpful guidance in relation to other roles which includes, but is not limited to, the COLP, COFA and authorised signatory.

Authorisation to take trainees; If firms change their legal status, will their authorisation be transferred to the new entity?

A. As long as the training principal and the number of principals in the body remain the same then we will transfer an organisation's authorisation to take trainees. If the number of principals is reduced, and/or the training principal leaves, the organisation will need to reapply for authorisation.

Will the SRA check up to see how ABSs are doing, once licences have been granted?

A. Yes. Once a licence has been granted, the information is passed to our Supervision team which works closely with other SRA departments to ensure information is shared. A supervisor will engage with all firms, including an ABS body, and this can take various forms including desk-based contact, and/or a visit, using our risk and outcomes focused approach.