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SRA marks a year of ABS licensing

The Solicitors Regulation Authority (SRA) has completed its first year of authorising and regulating alternative business structures (ABS).

This work is already enabling change and innovation in the legal services market and in the way legal services are being provided to the public. The SRA was approved as an ABS licensing authority by the Legal Services Board (LSB) in December 2011 and started accepting applications on 3 January 2012.

By the end of that week, a total of 30 initial Stage 1 "expressions of interest" applications had been received. Since then, 454 firms have started the application process. Some 117 firms have completed the submission of all necessary information and 74 licences have been granted; with a further 19 close to completion.

Among those approved have been Co-operative Legal Services (one of the first three), Parabis Law, Irwin Mitchell, Lyons Davidson, Russell Jones Walker, Quindell, Abbey Protection Group, New Law, Keoghs LLP and Amelans. Alongside these firms, the SRA has also granted licences to smaller organisations, such as the other two of the first three licensed, John Welch and Stammers in Oxfordshire and Lawbridge in Kent. Both of these converted to ABSs primarily to allow non-lawyers who had been integral parts of the firm to have partner status.

Around 40 of those approved have received their licence over the last month or so, an acceleration predicted by SRA Chief Executive Antony Townsend when he addressed the Westminster Policy Forum on 18 October. The SRA has received the necessary information from those firms that had lodged applications and been able to process them accordingly.

The SRA has learned from the operation of the new system and, in the light of that learning, revised its guidance to applicants; firstly in June, then again in October. The amended guidance has been led by both feedback from firms going through the process, and also from the SRA identifying themes as it deals with the applications. A video that offers advice on the process is also currently in production.

Samantha Barrass, SRA Executive Director, said: “We are pleased with the number and range of ABSs that have entered the legal market in the past 12 months. The acceleration of approvals reflects both improvements we are making to our processes, and applicants responding to our requests for information. Our advice to prospective applicants is to engage with the SRA before making an application.

"You should study the guidance on our website carefully as well as the application form and related guidance and respond to any follow-up queries that we have promptly, to ensure the approval timescale forms part of your commercial considerations.”

Looking ahead, the SRA is expecting further ABS applications to come through during 2013 and the range of types of business and services offered to continue to develop and expand as the possibilities afforded by the increased flexibility of the ABS model are better understood by the market.

More information on ABSs

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