The Solicitors Regulation Authority is unlikely to relax its rules on allowing firms to enter into deals with other businesses in advance of the licensing of alternative business structures, a paper prepared by the regulator has indicated.

The paper, which will be discussed by the SRA board this week, suggests that the profession would be ‘confused’ if the ‘clarity of the message in the [SRA’s] guidance of July 2009 is watered down in any way’.

It adds that ‘a bright-line position is clearer for the regulated community and for the public’.

Rather than relaxing the guidance, the SRA is instead expected to focus on providing assistance and support to firms in relation to their alternative business structure plans. However, the paper notes that there has been ‘some limited pressure’ on the SRA to relax the rules.

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.