The Solicitors Regulation Authority today announced a review of its approach to authorising multi-disciplinary practices after seeing fewer ABS applications than predicted.

One-stop shops for clients needing more than one professional service were one of the key innovations brought in by the Legal Services Act 2007.

But the regulator reported a ‘lower-than-expected’ number of alternative business structure applications from organisations wanting to provide a range of services.

Executive director Crispin Passmore (pictured), in his first keynote speech in London today, said the SRA would consult in the summer of proposals around a change in licensing MDPs as ABS.

Passmore said: ‘The scope of our regulation for MDPs seems to be a problem. There is a serious risk this is too complicated and a barrier to entry and innovation.

‘For example, we are particularly concerned about an MDP providing some or all of its non-reserved legal services through non-lawyers who are already regulated. If the firm wishes to separate its reserved legal activities out, this is likely to be prevented by our complex approach.’

Passmore said some multi disciplinary ABSs have had to be granted complicated waivers which have created delays and put some applicants off altogether.

The SRA made it clear that MDPs would continue to be authorised and regulated as a whole entity, but it would seek to remove duplicate regulation for some of their activities. This in turn would make services more affordable and potentially benefit clients not currently served by the legal profession.

Proposals for changes to MDP regulation will be presented to the SRA board in May and a consultation then started with the profession.

The regulator has also announced two further measures to reduce regulation.

The SRA is proposing to drop the keeping of the roll as an annual exercise: currently those wanting to retain their status as a non-practising solicitor have to pay an administration fee of £20. The process takes the SRA weeks to complete and the regulator now wants to carry out the exercise only when there is a regulatory need.

For residual balances in the client account, the SRA has suggested increasing from £50 to £500 the limit that solicitors can redistribute to charity without applying for permission.

Current rules allow firms to donate untraceable balances up to £50 to charity. Anything over this amount requires written permission from the SRA.

By increasing the limit, solicitors who cannot find clients who deposited the money despite having taken all reasonable steps will be able to deal with a greater proportion of cases without the need to seek individual approval.

The SRA receives an average of 900 such requests each year, and solicitors have redistributed more than £1m in unclaimed client monies.