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New SRA Handbook puts clients' needs first

Legal services in England and Wales are set for a new era, as the Solicitors Regulation Authority today unveiled its much-anticipated Handbook, which includes its plans for regulating a new type of legal services provider.

A new approach to regulation, based on ten mandatory principles, will give lawyers greater freedom over how to achieve the best results for their clients, while alternative business structures (ABS) could radically change the make-up of law firms.

Outcomes-focused regulation (OFR) will free lawyers from "box-ticking and form filling" and instead give them the freedom to concentrate on the things that really matter to clients—service and results.

The SRA's traditional approach, that required lawyers to comply with a myriad of detailed rules and regulations, will now be replaced by ten mandatory principles. These will govern solicitors, law firms regulated by the SRA and everyone who works in them—including owners who may not be lawyers.

OFR will allow the regulator to focus on breaches of principles and failure to achieve defined outcomes, rather than assessing whether detailed rules are being followed.

But the SRA stresses that it will not mean a lowering of standards. SRA Chief Executive Antony Townsend explained: "This is not light-touch regulation, it is a framework that will allow the SRA to regulate firmly and fairly while legal services providers are given the chance to serve their clients in the best possible way.

"Our primary concern will be to work with firms to improve standards. Only when failures are serious or a firm does not show the will to improve will we consider taking formal action."

The Handbook stresses that newly-formed ABS which are licensed by the SRA will be required to uphold the same professional standards as traditional firms and that clients and funds will receive the same level of protection.

Anyone with a material interest in an ABS will be subject to a suitability test while the SRA's existing indemnity insurance and compensation fund provisions will apply to ABS in respect of all "regulated" activities.

Firms now have six months to familiarise themselves with the Handbook and 15 roadshows have been organised around England and Wales when solicitors and others working in law firms will have the opportunity to hear presentations from senior SRA representatives.

Unveiling the Handbook Mr Townsend said: "This is the result of two years' intensive preparation and significant effort by colleagues at the SRA, working closely with consumer groups, solicitor organisations, and many others.

"We are proud of what we have produced and believe it will open the door to a new era for legal services, with the needs of the client first and foremost. We firmly believe that this is the best way forward for clients of legal services in England and Wales, and for those who offer such services to the public."

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