Solicitors Regulation Authority prepares for firm-based regulation
15 January 2009
The Solicitors Regulation Authority (SRA) has launched two new consultations on its website in the run-up to March, when it is expected that key parts of the Legal Services Act 2007 (LSA) will come into force, giving the SRA new regulatory powers. The new powers will allow the SRA to regulate legal disciplinary practices with up to 25 per cent non-lawyer partners.
The LSA will make some fundamental changes to the SRA's regulatory activities - providing for firm-based regulation, rather than focusing mainly on individual solicitors. In the light of these changes and the SRA's adoption of a more explicit risk-based approach to regulation, the first of the new consultations considers how we will develop a firm-based approach to enforcement and disciplinary action.
The second consultation proposes what information will be required from firms at the annual renewal exercise in 2009. The SRA consulted early last year (February 2008) on information requirements under the Legal Services Act (download a report on the responses).
Bearing in mind the responses received from the previous consultation, the SRA proposes to ask firms to supply details of turnover, work types, number of non-solicitor fee earners, and the number of negligence claims. The information will be used to develop a new fee strategy for 2010 onwards and also help in risk assessment.
The SRA website now contains the new forms that can be used by firms to apply for approval of potential non-lawyer partners in anticipation of the new powers. It also contains the application forms for new firms and LDPs who want to set up from March.
In addition, there is guidance on preparing for alternative business structures (ABSs) and ensuring that clients are protected.
Antony Townsend, chief executive of the SRA, said: "The new regulatory regime under the Legal Services Act will be with us in a matter of weeks.
"The firm-based approach to regulation represents a fundamental shift in the way we will regulate. Although we will still take disciplinary action against individual solicitors who breach the rules, we believe that firms have a responsibility to ensure compliance through effective management, and in many cases it will be more effective and proportionate to take action against a firm.
"We need improved data on firms in order to develop a better risk-based approach to regulation. We are keen to work with the profession in a co-operative way on improving regulation."
To learn more about the consultations, follow the links below.
Responses are needed by 31 March 2009.