Law firms engaged in financial services work seem to have been spared the cost and inconvenience of hiving-off, according to a paper published last week by the Financial Services Authority (FSA).The paper deals with proposed regulation by the FSA of around 2,000 professional firms doing mainstream investment business when it takes over from professional bodies.Firms involved in financial services had feared pressure to hive-off partly due to a more harsh regulatory regime for both mainstream and non-mainstream investment work.

Non-mainstream work at other firms would remain subject only to Law Society regulation.

According to the paper, firms will not face detailed regulatory requirements for non-mainstream work.The FSA also confirmed that solicitors doing investment work under existing regulatory regimes would not be required to retrain or sit further examinations.

However, individuals will have to be competence-assessed by their firms.Alison Crawley, head of professional ethics at the Law Society, said the new regime recognised low risk areas of work and was being structured accordingly.Sue Allen