Regulators pondering major changes to the ways solicitors can practice have given themselves more time to make a decision.
The Solicitors Regulation Authority has applied for permission to allow solicitor to provide unreserved legal services from unauthorised businesses, as well as to let self-employed solicitors operate on a freelance basis. The Law Society strongly opposes the plan.
The rationale is to create a more open legal market and increase competition, but Chancery Lane, among others, has raised questions about the protections available to clients using these new categories of solicitor.
Now the Legal Services Board has confirmed it needs more time to decide on the application: a verdict had been due within 28 days of the decision period starting last month, but that has now been extended to 90 days. A ruling is expected by 5 November.
In a letter to SRA chief executive Paul Philip, his LSB equivalent Neil Buckley says: ‘Given that this is a substantial application, the LSB has concluded that we need to extend the initial decision period to allow sufficient time for the LSB to consider the SRA’s changes.’
The SRA’s application, which also includes plans for simplified accounts rules, a new set of principles and a code of conduct for solicitors and firms, has been in the offing for almost a year.
The regulator insists it is removing restrictions it cannot justify and allowing more freedom for those solicitors to innovate and provide services to meet consumers’ needs.
It already issues individual waivers for solicitors to work outside of regulated entities, and argues in its application that a more formal lifting of restrictions can help businesses to create new models for offering legal services.
As a safeguard, freelance solicitors would be required to have ‘adequate and appropriate’ professional indemnity insurance cover and would be required to explain to clients they are not covered by minimum terms and conditions. They must also have three years’ experience as a solicitor.
Practitioners working for unregulated businesses must also explain their insurance arrangements and be clear to clients they will not be eligible to submit a claim to the SRA compensation fund if things go wrong.
The Law Society has expressed concern about creating different tiers in the legal profession which offering different client protection under different rules.