The Solicitors Regulation Authority says significant improvements have been made since criticism of its handling of alternative business structure applications.

Minutes from a July meeting of the oversight regulator the Legal Services Board, published last week, show concern that the SRA was struggling to deal with applications from non-traditional firms.

The minutes reveal that the SRA had already missed deadlines for improvements to the authorisation process. The issue has also been discussed at Westminster with ministerial interest apparently prompted by complaints from applicants disappointed with the process.

Certain applications are known to have taken at least 18 months to be completed and more than 100 applications are believed to be pending.

According to the minutes: ‘The SRA appears to be more comfortable authorising ABS firms that more closely resemble traditional law firms than those seeking to deliver more explicitly innovative models of service.’

The LSB agreed to continue to monitor the SRA’s performance and ABS authorisation but opted not to start a formal investigation. The oversight regulator will also conduct a survey of ABS applicants and licencees.

The SRA made clear that it is easier to check the corporate structure and governance arrangements of firms already known to the regulator that are making minor changes to their management.

It said full background checks need to be run on those who will be involved in the provision of legal services, as well as scrutiny of their management arrangements.

Firms that are incorporating other services – insurance firms for example – also need to have their proposal checked against the Separate Business Rules to ensure that issues such as protection of client confidentiality are protected.

Executive director Samantha Barrass said: ‘Those applications now deemed “work in progress” are “work in progress” for good, non-bureaucratic, risk-based reasons. It is evident from the numbers of ABSs now licensed that our new approach has had a big impact on numbers.’