The oversight regulator has rubber-stamped proposals to allow solicitors and law firms to own or manage businesses in other professions.
The Legal Services Board today confirmed it has granted the application from the Solicitors Regulation Authority to relax the separate-business rule.
Approval means the SRA will extend the services that law firms or sole practitioners can carry out, to include accountancy services and professional and specialist support services to businesses, including human resources, recruitment and systems support.
The reforms will also remove prohibitions on SRA-authorised bodies and individuals having links with separate businesses that carry out non-reserved legal activities.
The SRA has said it is keen to provide a level playing field for firms it regulates in light of the emergence in recent years of alternative business structures and multi-disciplinary practices.
The rule change has been opposed by the Law Society and the Junior Lawyers Division, who have argued that encouraging the growth of an unregulated legal services market could harm professional standards.
But the LSB says the reforms are consistent with its objective of breaking down regulatory barriers and should help to ‘promote competition, improve access to justice and increase consumer choice’.
The LSB’s decision notice acknowledged the changes carry ‘some risks’ to consumers, such as consumers using separate businesses losing their recourse to the Legal Ombudsman, but said the SRA has mitigated these risks and will assess the impact within two years.
‘The LSB also considers that there would be risks to consumers in not seeking to reform the current requirements, through maintaining rules that have the potential to stifle competition, innovation and choice.’
The separate business must not carry out reserved legal activities or immigration work, and clients may be introduced to the separate business only if they have given consent. Separate businesses must not be represented as regulated by the SRA.