Proposals to relax the Solicitors Regulation Authority rules governing law firms' running of businesses carrying out non-regulated activities have met a frosty response from representative bodies. 

Responding to a consultation on the so-called separate business rule, the Law Society said the proposed relaxation has the potential to cause serious harm to consumers.

'It is likely to lead to an increase in the number of unregulated firms offering legal advice to consumers. This will create confusion for consumers and may well mean that they lack redress if problems arise.'

The regulator had said the changes were necessary to level the field between traditional firms, alternative business structures and unregulated service providers.

However, Chancery Lane said: 'There is limited evidence of the demand for this change either from regulated providers or those who wish to enter the market. Nor is there hard evidence that the changes will provide benefits to consumers or the wider public interest.' As a matter of principle, it added, 'individuals who qualify as solicitors and wish then to practise as such should be subject to the same duties and regulation in all the legal services that they provide'.

The City of London Law Society said the proposal was 'overly hasty, not based on sound data and has been made without a proper assessment of the likely impact, which... may lead to a splintering and destabilisation of the profession and damage to the solicitor brand, at home and overseas'.

The SRA consultation closes today (Thursday).