Following on from its consultation, which closed on 21st September 2016, The Solicitors Regulation Authority (SRA) is moving ahead with new proposals for unregulated practices.
In its drive to open up the legal services market even further, the Authority proposes to authorise solicitors to work in unregulated businesses to allow easier access to the law for consumers.
With multi-disciplinary practices well-established in Scotland, many Scottish solicitors will be wondering what all the fuss is about. However, in England and Wales, this represents a sea change in the delivery of legal services.
Following the advent of Alternative Business Structures (ABSs), many of the accountancy led ABSs employ solicitors who fulfil that role but are unable to call themselves solicitors. This meant they had to come off the roll and were, effectively, unregulated. This contrasts with those ABSs which are owned by non-lawyers but allow solicitors to remain on the roll because the entity is regulated by the SRA.
Confusing and somewhat contradictory! The logical next step is to address this issue to allow ease of access to consumers in a backdrop of declining legal aid availability.
The obvious way around the dichotomy is a two-pronged approach.
This would mean two separate codes. One for regulated entities and another for solicitors who are not working in a regulated entity. The general consensus from the consultation exercise is that this would be the preferred way forward.
However, support for this idea is not unanimous. It would mean that solicitors working in unregulated entities would not be required to sign up for professional indemnity insurance. In addition, any advice they give would not be protected by professional legal privilege. It’s a thorny issue.
The proposals raise a plethora of issues:
The list is endless. Yet, at the end of all this, there is one overriding factor that looms large for me: safeguarding the interests of clients. Clients need clarity about the consequences of dealing with one form of legal service provider and another. Whilst I’m not against changing the rules to open up the market, it seems to me that protecting clients’ interests is paramount. Doing so will also protect the reputation of the profession itself.
Let’s keep a close eye on future moves.
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