SRA Update
SRA's international strategy: Global entity regulation for all
SRA Update Issue 22 – December 2011
Hot on the heels of the 6 October introduction of outcomes-focused regulation, we're now asking for your feedback on our latest proposals to regulate the international practice of firms overseas.
We have moved into a whole new area of legal regulation that will necessarily involve the authorisation and supervision of law firms with a presence in both England and Wales and abroad, as well as overseas, interested in becoming ABS in England and Wales.
The regulation of international practice looks at replacing the old system of registering foreign offices of England and Wales registered LLPs with a single group entity recognition.
We will also cease to regulate foreign offices of foreign law firms in most cases, as these have simply been captured in the past because of their links to an English LLP and not because of any genuine connection or risk to consumers or clients in England and Wales.
The proposals cut through at least some of the regulatory maze facing international firms, supporting them in the development of single global businesses.
We are proposing to abolish the old system of registering foreign offices of England- and Wales-based firms and replace it with a single recognition which applies across the entity's international offices.
The consultation sets out how we propose to apply outcomes-focused regulation to those overseas offices.
We are aiming to arrive at an approach which gives consumers protection without stifling the development of a competitive and highly sophisticated international sector.
Greater flexibility
If the proposals are accepted, firms will have greater flexibility to operate in any form that is allowed in other countries—and bring into their partnerships anyone who is recognised as a lawyer in their home country.
Under certain circumstances, a foreign law firm may be able to have the SRA as its lead regulator outside of England and Wales, giving an added incentive for firms to be headquartered in London.
SRA recognition would provide the "hallmark" representing high professional standards and compliance, and this could be attractive to clients and other parties such as insurers.
Opening up access to requalification in England and Wales
We are suggesting that lawyers from certain jurisdictions who have not previously been permitted to become partners in solicitors' firms here should now be able to do so.
Executive Director of Supervision, Risk and International Samantha Barrass
Last year we paved the way for this by opening up a new requalification track in English law for foreign lawyers—the Qualified Lawyers Transfer Scheme (QLTS).
We are also seeking views on whether European law firms should have more flexibility to choose whether to be regulated as foreign law firms or as English firms, depending on the services they wish to offer.
Executive Director of Supervision, Risk and International Samantha Barrass said: "We need to clarify how we can best ensure consumer protection without unnecessary bureaucracy and restrictions for firms which have their headquarters or registration in England and Wales but do business abroad.
"We also want to look again at related issues such as the regulation of registered foreign lawyers."
International adviser Alison Hook is responsible for the development of the SRA's international strategy and is also establishing a dialogue between the SRA and legal regulators in other key jurisdictions.
Please let us have your views by 15 February 2012. Visit www.sra.org.uk/consultations.