The Solicitors Regulation Authority has found that a law firm overstepped the rules on alternative business structures in an arrangement with an outsourcer.

Publishing an investigation into the agreement between Bradford, Glasgow and Newcastle firm Optima Legal and outsourcing company Capita, the SRA said that ‘while Optima Legal’s original outsourcing and funding arrangements were put together at a time when the form of ABSs was being widely debated, the [arrangements] went further than was allowed by the rules’.

Optima, previously part of national firm DLA Piper, had entered into a loan agreement with Capita which gave the outsourcer an option to obtain shares in the firm once ABS legislation comes into force in October 2011. The agreement provided for Capita to supply administration, HR and IT services to Optima.

Optima’s outsourcing and funding arrangements were restructured in January. The firm had taken advice from leading counsel before entering into the agreement with Capita, and cooperated fully during the SRA investigation. No clients were adversely affected.