Your questions

Looking to the future

12 June 2017

Here are answers to the most common questions we have received about our work.

Read our responses to the LTTF - flexibility and public protection consultation and Accounts Rule review consultation.

We’ll continue to post answers to your questions– so keep them coming. If you have a question that hasn’t been answered, please send us your question and we’ll do our best to respond.

Looking to the future consultation

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We have also engaged widely through social media and digital and online activity, such as webinars. A breakdown of the respondents to the formal consultation is provided in our response to consultation.


Read the full set of published responses.


We have also commissioned the Centre for Strategy and Evaluation Services (CSES) and Dr Chris Decker, of Oxford University, to help us to develop an evaluation framework to measure the impacts of the changes.


This will include changes to our practising and authorisation requirements.


Our current Practice Framework Rules go beyond the requirements of Section 15 and prevent solicitors from providing non-reserved legal services to the public unless permitted to do so. We know this is problematic for some organisations because our rules mean that they cannot respond to consumer demand or develop their business model. Our proposals to allow solicitors to provide non reserved legal services to the public through non SRA authorised organisations will better reflect S15.1

1. S15(4) allows employees (who are individually authorised) to carry on reserved legal activities for unauthorised employers provided the employer does not provide reserved legal services to the public or a section of the public as part of its business.

Benefits of our new approach

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The new Principles

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The Code for Individuals

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The Code for Firms

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Compliance and enforcement

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We are moving away from complex and overly prescriptive rules, and want to give professionals more responsibility and flexibility to decide how they comply. This will inevitably create some 'grey areas' when it comes to compliance. We will be reviewing all of our current guidance and information to determine what support is needed.
We will need to get the balance right. We do not want to try to outline all possible scenarios in guidance, and end up repeating the detailed rules of the current Handbook. This would simply undermine the flexibility we are trying to create.

If that course of action comes into question, we will assess the risk that action poses to both the public and to our regulatory objectives as set out in the Legal Services Act 2007 and then take appropriate action. We are currently working on a revised enforcement strategy, which we will consult on as part if phase 2.

If we do take action, we will make sure our reasons for doing so are clear, proportionate, targeted and transparent. Our approach to enforcement will be set out in our revised enforcement strategy which we will be consulting on later this year.

Accounts Rules

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All fees and disbursements paid in advance are considered client money until the point at which they are billed. These payments must therefore be held in a client account, unless they are the only categories of client money held by the firm and the firm takes advantage of the exemption that is set out in new rule 2.2.


If you hold monies paid in advance for fees and disbursements as well other types of client money then you will need to continue to operate a client account as now.

If the only money held or received by you is advance payment for fees and any unpaid disbursements (prior to delivery of a bill for the same) then you can choose to not operate a client account (as permitted in rule 2.2) and hold these monies in your business account.

You can also choose to continue to operate a client account even if the only client money you hold is for fees and disbursements paid in advance. You do however need to inform your client (ahead of you receiving any client money) where and how it will be held.

You do not have to comply with the requirements in rule 8.1(b), 8.1(c) and 8.3.

There is no requirement on you to obtain an accountants report if the only money held by you is money that is held or received in accordance with this rule.




We will update and make additions as required. Any new guidance will be made available well in advance of the new rules coming into force.


You need to ensure that you are acting in the best interest of your client (as required by our Code of Conduct) when handling client money.

The whistle blowing requirements are set out in section 34 of the Solicitors Act 1974. As such, we have removed the duplication from our Accounts Rules, but the whistle blowing duties remain in place for Reporting Accountants.

The rules now treat all money for fees equally. Provided you have given a bill of costs, or other written notification, to the client you can take any such payment for the specific sum identified into your firm's business account.


Where the only money represents payments received from the Legal Aid Agency for your costs then you do not need to hold this in a client account.


We will issue guidance for the criteria and relevant risk factors we will use when making the decision to require a report to be submitted.



The rules allow you to discuss and agree with your client what arrangements work best and are in their interests. You can therefore, hold money for one client in a client account and agree to enter into a TPMA with another client.




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Non-LSA regulated firms

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The proposed changes would make it easier for solicitors, who are arguably best placed to provide quality services, to work in this expanding market. This could help push standards up while driving costs down. It could also help tackle the problem that many people and businesses still do not access the legal services they need. For example only 13 per cent of small businesses say that lawyers provide value for money.

Solicitors will bring their training and qualifications, ethical behaviour and standards of conduct to non-LSA regulated firms and their clients. The Code of Conduct for Solicitors would apply to them, as it would to any other individual acting as a solicitor. This will include making sure they keep their professional knowledge and skills up to date, and supervise the work of those they manage or supervise, and the work being done for clients.

Clients of these solicitors will be protected by existing consumer protection legislation, for example, if the work is not completed or if the firm becomes insolvent. All solicitors, wherever they work, will have an obligation to provide information to their clients about the regulatory protections available.

Consumers will have a clear choice between different types of providers and the associated consumer protections. We are committed to making sure there is very clear communications to inform that choice at an early stage. We are looking at what information, for example logos, might help consumers to navigate those choices more effectively. We will be consulting later this year on more detailed proposals for consumer information

Access to the Legal Ombudsman attaches  to services provided by 'authorised persons' - which will include solicitors working outside SRA regulated firms

In practice, legal services providers - like many other businesses - are likely to have insurance so that they and their employees are protected from liability. This is something that solicitors will need to discuss with their potential employer.

We are aware that we need to make sure there is absolute clarity for consumers about what protections are in place for them, and are currently thinking through what information solicitors will need to provide to clients to make sure they know about the package of protections in place. The individual code requires solicitors to ensure that clients understand whether and how services are regulated (standard 8.10). Solicitors must also ensure their clients understand the regulatory protections available to them (standard 8.11).

We are also looking at what tools consumers might need to help them navigate this choice including what information can be provided at an early stage. We will be consulting later this year on more detailed proposals for consumer information.

Solicitors who are supervising others will remain accountable, and will need to effectively supervise the work being done for clients. The Code of Conduct also requires solicitors to make sure that the individuals they manage are competent to carry out their role, and keep their professional knowledge and skills up to date.


Support for solicitors and firms

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