News release

SRA takes new look at MDPs

The Solicitors Regulation Authority (SRA) is to review its approach to authorising multi-disciplinary practices (MDPs), it was revealed today.

SRA Executive Director for Policy, Crispin Passmore, used his first keynote speech for the Authority since joining in January to announce the move. Speaking at the Managing Partner COLP and COFA Conference in De Vere Holborn Bars in London, Mr Passmore said that the SRA would be consulting in the summer on proposals around a change in licensing MDPs as alternative business structures (ABSs).

MDP ABSs that provide one-stop shops for clients needing more than one professional service were one of the key benefits envisaged by the changes brought in by the Legal Services Act 2007. There have been lower-than-expected numbers of applications however, and feedback from would-be ABSs suggest that it is the definition of the scope of the SRA's regulation in MDPs that is the stumbling block.

Mr Passmore's speech, "Reducing Regulatory Burdens", will outline how the SRA has been following up its commitment to removing unnecessary processes, as unveiled in its Red Tape Initiative. A further raft of proposals have been revealed, including two consultations launched this week on potentially abandoning the Keeping of the Roll exercise as an annual event and increasing the limit for residual balances in the client account that can be redistributed. This follows the announcement last week of the intention to give sole practitioners "lifetime authorisation", as other firms receive, rather than annually applying for an endorsement on their practising certificate.

The consultation on the review of the SRA's approach to authorising MDPs is the latest announcement in the drive to reduce the regulatory burden in line with its Strategic Plan 2013-15.

Crispin Passmore said: "I am today setting out our thinking in moving to an effective regulatory framework for the authorisation and supervision of MDPs providing legal and non-legal services. We are considering radical changes to the rules governing the authorisation and supervision of ABSs. "The scope of our regulation for MDPs seems to be a problem. There is a serious risk this is too complicated and a barrier to entry and innovation.

"For example, we are particularly concerned about an MDP providing some or all of its non-reserved legal services through non-lawyers who are already regulated. If the firm wishes to separate its reserved legal activities out, this is likely to be prevented by our complex approach.

"As a result, some MDP ABSs have had to be granted complicated waivers. This could be costly for those applying, could delay applications, create unnecessary burdens on applicants, and may even have put some off altogether."

Proposals are being drawn up to be presented to the SRA's Board in May. If the Board agrees, a consultation exercise will then be launched so views on the review can be gathered. Ahead of that, a policy statement outlining the current position and SRA thinking has also been published today.

Crispin Passmore's speech can be accessed here:

Go to the speech

The policy statement can be accessed here:

Read the policy statement

 
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