The Solicitors Regulation Authority is to review its current guidance on what arrangements firms may enter into with other businesses when alternative business structures come into force in October 2011.

However, the SRA board was emphatic that ‘those in control of law firms must be under the control of regulation’.

In a paper submitted by the SRA’s legal director, the board had been invited to confirm the guidance it gave in July 2009 in relation to pre-emptive ABS arrangements.

However, at a meeting today, the board confirmed the principles underpinning the guidance, but determined to look at the advice again, to provide more clarity for the profession.

Some members of the board expressed concern that the current guidance may be too prohibitive. Board member Graham Chisnall said: ‘Surely it is entirely reasonable for people to be able to explore and put arrangements in place, and to prevent them from doing that is unreasonable.’

SRA chief executive Anthony Townsend (pictured) said: ‘Those in control of law firms must be under the control of the regulator. We want to avoid the position where de facto control goes to the [outside business]. We can do some further work, as long as that principle stands.’

Charles Plant, chair of the SRA board, added: ‘We need to look at the guidance again so that it can be further refined, and so that there is clarity. We all endorse Anthony Townsend’s principle, but we will go away and look at the current guidance in the light of comments from round the table’.

According to the SRA’s July 2009 guidance, law firms may have discussions with potential ABS business partners, and may enter into non-binding agreements, as well as registering company and domain names.

However, until ABSs are permitted on 6 October 2011, the rules do not permit solicitors to enter into any arrangement that would involve selling any part of their ownership interest, or that would put their future business partner in de facto control of material decisions about the business.

A recent SRA investigation found that Bradford, Glasgow and Newcastle firm Optima Legal had overstepped the rules in an arrangement with outsourcer Capita.