In June 2018, the Solicitors Regulation Authority (SRA) announced a series of reforms. These are designed to give legal professionals greater flexibility and improve access to justice.
The reforms have been generated from the Looking to the Future programme, which has seen four major consultations and the involvement of over 35,000 professionals and members of the public.
The rationale behind the reforms
The reforms are aimed to remove pages and pages of complex, costly rules, and allow firms to concentrate on protecting clients. Research shows that many people, especially SMEs struggle to access legal services and a key reason for this is lack of information. The reforms aim to change this by making it easier for clients to understand the protections in place and by enabling more competition within the industry.
Shorter, simpler rules
A clear signal that the SRA has listened to consultations is in the length of its new handbook which sets out the principles, codes and rules for solicitors and law firms. At 130 pages, it is 300 pages shorter than the current handbook.
From 2019, the following changes will be phased in.
- separate codes of conduct and account rules will be created for law firms and solicitors
- allowing solicitors to work on a freelance basis, although they will not be able to hold client monies
- allowing solicitors to carry out ‘non-reserved’ legal work in a business not regulated by the SRA; ensuring such solicitors are bound by the Code of Conduct and to clients the protections that are in place
- a new enforcement strategy which details with greater clarity when action will be taken against a solicitor or a firm
Criticism of the reforms
Not everyone has been positive about the proposed reforms. For example, the Legal Services Consumer Panel stated:
“…some proposals remove key consumer protection in order to introduce greater flexibility. We do not believe that the SRA has struck the right balance between flexibility and the need for consumer protection in a number of these areas. When taken together these proposals are unlikely to assist consumers, especially vulnerable ones, in choosing services at times of distress”.
The Law Society also has serious concerns about the reforms, including the removal of the ‘qualified to supervise’ rule, allowing freelancers to work outside the protections of recognised sole practice and allowing solicitors to deliver non-reserved legal services from unregulated entities.
The Law Society’s ultimate view is that flexibility within the profession should not come at the expense of clients.
The SRA’s response to the feedback
In response to the feedback, the SRA has changed its original proposal to:
- ensure that all solicitors running a law firm or going freelance have at least three years’ experience
- drop proposals to publicise the details of client complaints because taking such information out of context could seriously damage the reputation of the Solicitor and/or law firm
- amending the definitions around client money so the status quo remains
Paul Philip, SRA Chief Executive, made a statement saying:
“We have worked closely with the profession and the public to develop our proposals over the last four years, engaging with more than 35,000 people. I am pleased there was widespread support for our overall approach and that we received so much useful feedback.”
“We are now ready to make the changes that are needed to modernise both our regulation and the legal market. Our reforms focus on what matters: the high professional standards that offer real public protection rather than unnecessary bureaucracy that generates costs, constrains firms and hinders access to legal services. We believe that the changes will make it easier for firms and solicitors to do business and to meet the needs of those who need their services”.
Firms need to start preparing for the 2019 implementation of the new rules and consider their obligations under the reformed structure. Considerations must include what commercial advantages will be available under the new structure, what new duties and responsibilities will transpire for the practice, and how compliance will be maintained going forward.
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