The new practice rule 13 - supervision and management of a practice and text of the new rule

Council statement on waivers of practice rule 13On 23 December 1999 a new version of practice rule 13 (supervision and management of a practice) will replace the 'old' rule 13 (supervision and management of an office).Existing waivers of the 'old' rule granted in the period 1 September 1990 to 4 March 1999 are hereby extended, as waivers of the new rule 13, until the earlier of:-- any expiry date in the existing waiver; or-- 31 December 2001.There are also important transitional provisions in the new rule itself, and the extension of a waiver is without prejudice to any transitional provision which may be applicable.24 March 1999Supervision and management of a practiceThe profession was consulted at the end of 1993 about possible changes to practice rule 13 on the supervision and management of a solicitor's office.

A new rule was approved by the Council in December 1994.

The rule then had to be dealt with under the Schedul e 4 procedure of the Courts and Legal Services Act 1990.

The new rule as amended finally received the approval of the Lord Chancellor on 23rd December 1998.

The new rule comes into force on 23rd December 1999.The main changes(a) The new rule imposes a general duty to ensure that a practice is properly supervised and managed, supported by examples of evidence that could be called upon should a failure of that duty be alleged.(b) The new rule introduces the concept of a 'solicitor qualified to supervise'.

The existing requirement, based on effluxion of time since admission, has been replaced by a requirement based on a combination of experience and training.

To be a solicitor qualified to supervise, a solicitor must have:-- held a practising certificate for at least 36 months within the previous ten years; and-- completed the training specified from time to time by the Society.

The training specified for the purpose of the rule is attendance at or participation in any course(s) or programme(s) of learning on management skills, involving attendance or participation for a minimum of 12 hours.

(Solicitors who did the Best Practice course have already done six of the 12 hours.

Those who have done the Law Society's Management Course Stage 1 have done seven hours.

Management Course Stage 2 counts for five hours.)Once a solicitor has completed the training specified for the time being under the new rule, any new training requirement imposed under the rule at a later date will not affect that solicitor.

However, it should be noted that a solicitor may temporarily lose the status of a solicitor qualified to supervise if he or she ceases for an extended period to hold a practising certificate.(c) Every practice must have at least one principal who is a solicitor qualified to supervise.(d) Every office must have at least one solicitor qualified to supervise based at that office.

It will no longer be possible to have a legal executive or newly qualified solicitor managing an office with a three year qualified solicitor going in daily to supervise (subject, however, to the important transitional arrangements set out below; these are, regrettably but necessarily, somewhat complicated).The main transitional arrangements(i) A solicitor who was admitted three years or more on 11 December 1996 can supervise an office as under the old rule (or operate as a sole practitioner) until 22 December 2009 without having to satisfy the requirements set out at (b) above.

After that date he or she must satisfy those requirements, including completing the required training, to be a solicitor qualified to supervise.(ii) A solicitor who was admitted less than three years on 11 December 1996 and was actually managing an office at that date can continue managing the office (or another office), subject to supervision of the office on a daily basis as under the old rule, until 22 December 2009 without having to satisfy the requirements set out at (b) above.

After that date he or she must satisfy those requirements, including completing the required training, to be a solicitor qualified to supervise.(iii) Other solicitors, ie:-- solicitors admitted less than three years on 11 December 1996 and not actually managing an office at that date;-- solicitors who have qualified since 11 December 1996; and-- solicitors qualifying in the future can supervise or manage an office (or operate as sole practitioners) subject to the old rule until 22 December 1999 only.

After 22 December 1999 they must have:-- held a practising certificate for the relevant 3 6 month period; and-- completed the requisite training if they wish to be solicitors qualified to supervise (but subject to the provisions on waivers set out at (vi) and (viii) below).(iv) A three year FILEX actually managing an office on 11 December 1996 can go on managing the office (or another office), subject to supervision of the office on a daily basis as under the old rule, until 22 December 2009.

After that date he or she will no longer be able to run a solicitors' office as a FILEX without a solicitor qualified to supervise working at the office.

Of course it will be open to the FILEX to fulfil that role him- or herself by becoming a solicitor, holding practising certificates for the relevant 36 month period and completing the required training.(v) A person who is a three year FILEX but who was not managing an office as a FILEX on 11 December 1996 can manage an office subject to supervision of the office on a daily basis under the old rule until 22 December 1999 only.

After that date he or she will no longer be able to run a solicitors' office as a FILEX without a solicitor qualified to supervise working at the office (subject, however, to the provisions on waivers set out at (vi), (vii) and (viii) below).

Of course it will be open to the FILEX him- or herself to fulfil the role of a solicitor qualified to supervise by becoming a solicitor, holding practising certificates for the relevant 36 month period and completing the required training.(vi) A person who, on 11 December 1996, held a waiver of the 1990 rule to supervise an office or (in the case of a solicitor) to operate as a sole practitioner, can go on supervising that office (or operating as a sole practitioner), subject to any conditions set out in the waiver, until 22 December 2009.

After that date there must be full compliance with all the requirements of the new rule.(vii) A person actually managing an office on 11 December 1996 under a waiver of the 1990 rule can go on managing that office, subject to supervision of the office on a daily basis, and subject to any conditions set out in the waiver, until 22 December 2009.

After that date a non-solicitor will no longer be able to run a solicitors' office without a solicitor qualified to supervise working at the office.

Of course it will be open to the non-solicitor to fulfil that role him- or herself by becoming a solicitor, holding practising certificates for the relevant 36 month period and completing the required training.(viii) Other persons holding a waiver of the old rule to supervise or manage an office or (in the case of a solicitor) to operate as a sole practitioner, granted in the period 1 September 1990 to 4 March 1999 (ie, persons not falling within (vi) or (vii) above), may have the benefit of an extension of the waiver for up to two years under the Council statement of 24 March 1999 (see above).Registered foreign lawyersThe position of registered foreign lawyers managing or supervising an office is not dealt with in this note.

Reference should be made to the new rule (see below) and the Council statement.Property-selling officesA proposal is likely to be put before the Council in April 1999 to make special provision for the supervision and management of property-selling offices.(Specific queries may be directed to Anne Philpot or Derek Mitchell; tel: 0171-242 1222.)TEXT OF THE NEW RULENew practice rule 13 (supervision and management of a practice) coming into force on 23 December 1999In this rule, words in italics are defined in the notes.(1) The principals in a practice mu st ensure that their practice is supervised and managed so as to provide for:(a) compliance with principal solicitors' duties at law and in conduct to exercise proper supervision over their admitted and unadmitted staff;(b) adequate supervision and direction of clients' matters;(c) compliance with the requirements of sections 22(2A) and 23(3) of the Solicitors Act 1974 as to the direction and supervision of unqualified persons;(d) effective management of the practice generally.(2) Every practice must have at least one principal who is a solicitor qualified to supervise.(3) Every office of the practice must have at least one solicitor qualified to supervise, for whom that office is his or her normal place of work.(4) This rule is to be interpreted in the light of the notes, and is subject to the transitional provisions set out in note (k).(5)(a) This rule applies to private practice, and to solicitors employed by a law centre.(b) The rule also applies to other employed solicitors, but only:(i) if they advise or act for members of the public under the legal aid scheme; or(ii) if, in acting for members of the public, they exercise any right of audience or right to conduct litigation, or supervise anyone exercising those rights.Notes(a) Principals' responsibility for the practicePrincipals are responsible at law and in conduct for their practices, and compliance with the rule does not derogate from this responsibility.(b) 'Supervision' and 'management'(i) 'Supervision' refers to the professional overseeing of staff and the professional overseeing of clients' matters.(ii) 'Management' is a wider concept, which encompasses the overall direction and development of the practice and its day-to-day control and administration.

Management functions include business efficiency as well as professional competence.(iii) Operationally, supervision and management may be delegated within an established framework for reporting and accountability.

However, the responsibility under paragraph (1)(a) of the rule, and the responsibility referred to in note (a) above, remain with the principals.(c) Evidence of effective supervision and managementWhere a question arises as to compliance with paragraph (1) of the rule, principals will be expected to be able to produce evidence of a systematic and effective approach to the supervision and management of the practice.

Such evidence may include the implementation by the practice of one or more of the following:(i) guidance on the supervision and execution of particular types of work issued from time to time by the Law Society including:(A) guidance on solicitors' responsibilities for the supervision of clerks exercising rights of audience under section 27(2)(e) of the Courts and Legal Services Act 1990; and(B) good practice guidelines on the recruitment and supervision of employees undertaking investment business;(ii) the practice's own properly documented management standards and procedures;(iii) practice management standards promoted from time to time by the Law Society;(iv) accounting standards and procedures promoted from time to time by the Law Society;(v) external quality standards such as BS EN ISO 9000 or Investors in People; and(vi) in the case of solicitors employed by a law centre, any management standards or procedures laid down by its management committee.(d) 'Qualified to supervise'A solicitor is qualified to supervise if he or she:(i) has held practising certificates for at least 36 months within the last ten years; and(ii) has completed the training specified from time to time by the Law Society for the purpose of the rule.(e) 'Normal place of work'(i) A solicitor's 'normal place of work' is the office from which he or she normally works, even though the day-to-day demands of practice may often take the solicitor out of the office.(ii) If a solicitor normally works from a particular office for a part of the working week, that office is his or her 'normal place of work' for that part of the week.

The solicitor may have a different 'normal place of work' for another part of the week.(iii) A solicitor who has a different 'normal place of work' for different parts of the week could be the sole solicitor qualified to supervise at different offices at different times in the week.

However, no solicitor can be the sole solicitor qualified to supervise at two different offices for the same part of the week.(iv) For compliance with paragraph (3) of the rule, an office must, for every part of the working week, have a solicitor qualified to supervise for whom that office is his or her 'normal place of work' for that part of the week.

This could be a different solicitor for different parts of the week.(v) The working week of an office includes early mornings, late evenings and weekends if work is carried on, and if so the office must have a solicitor qualified to supervise for those times.

However, it is not required that the solicitor qualified to supervise normally works at those times, provided that he or she:(A) is available for emergency consultation; and(B) pays occasional visits to the office during such times.(f) Working away from the officeIt is particularly important that systems of supervision and management encompass the work of:(i) those persons from time to time working away from the office - eg, at home, visiting clients, at court, at a police station, at a consulting room open only for a few hours per week, or staffing a stand at an exhibition;(ii) any person who normally works away from the office, such as a teleworker or homeworker.(g) Absence of solicitor qualified to supervise(i) When the solicitor qualified to supervise at an office is away on holiday, on sick leave, etc, suitable arrangements must be in place to ensure that any duties to clients and others are fully met.(ii) If the solicitor qualified to supervise will be away for a month or more, the arrangements will normally need to include the provision of another solicitor qualified to supervise at that office.(h) 'Right of audience' and 'right to conduct litigation''Right of audience' and 'right to conduct litigation' are to be interpreted in accordance with Part II and section 119 of the Courts and Legal Services Act 1990.(i) Recognised bodies'Principal', in relation to a recognised body, means a director of that body.(j) Registered foreign lawyers(i) A registered foreign lawyer who is a principal in the practice may fulfil the role of a 'solicitor qualified to supervise' for the purpose of paragraph (2) of the rule, provided that:(A) the practice has at least one principal who is a solicitor; and(B) the practice does not exercise or assume responsibility for any right of audience or any right to conduct litigation; and(C) the registered foreign lawyer has practised as a lawyer for at least 36 months within the last ten years; and(D) he or she has completed the training specified under note (d)(ii) above.(ii) A registered foreign lawyer who is a principal in the practice may fulfil the role of a 'solicitor qualified to supervise' for the purpose of p aragraph (3) of the rule or note (k)(ii)(C) below, provided that:(A) no right of audience or right to conduct litigation is exercised or supervised from that office; and(B) the registered foreign lawyer has practised as a lawyer for at least 36 months within the last ten years; and(C) he or she has completed the training specified under note (d)(ii) above.(k) Transitional provisionsFor a period of 10 years from 23 December 1999:(i) a solicitor or registered foreign lawyer who would not satisfy the requirements for a solicitor qualified to supervise can nevertheless fulfil that role for the purpose of paragraph (2) of the rule or note (k)(ii)(C) below, provided that:(A) immediately before 12 December 1996 he or she was qualified to supervise an office under Practice Rule 13(1)(a) as it then stood, or any waiver of that rule; and(B) any requirements of that rule or of any waiver continue to be met;(ii) a person who would not satisfy the requirements for a solicitor qualified to supervise can nevertheless fulfil that role for the purpose of paragraph (3) of the rule, provided that:(A) immediately before 12 December 1996 he or she was managing or employed to manage an office in compliance with Practice Rule 13(1)(b) as it then stood, or any waiver of that rule; and(B) any requirements of that rule or of any waiver continue to be met; and(C) the office is attended on a daily basis by a solicitor qualified to supervise.