The Legal Services Board has published the responses it has received to its February discussion paper on in house lawyers. This is part of the LSB's desire to encourage the front line regulators to align their framworks with Section 15 of the Legal Services Act 2007. This section precludes an authorised person providing reserved legal activities to the public when employed by an unauthorised entity.
The LSB has a point. The arrangements for in house lawyers for both the SRA and BSB pre-date Section 15 and owe more to historical accident than an objective analysis of regulatory risk.
The current SRA thinking seems to be to separate the regulation of the title of solicitor from the provision of reserved legal activities. In the in house context this would mean that a solicitor working in house could hold themselves out as a solicitor and could provide legal advice to the public as long as they did not provide reserved legal activities. Such an approach would provide the alignment with Section 15 of the LSA sought by the LSB. If this is where we end up this would further blur the distinction between regulated and unregulated legal market as solicitors would be overtly participating in both.
However, there are still practical difficulties in that the nature of the protection available to a client of a solicitor in an unregulated entity is less clear. Also, is legal professional privilege linked to the title of solicitor or the performance of reserved legal activities?
This debate could have far reaching consequences for more than just in house solicitors.
The responses to the discussion paper highlighted the wide range of issues that emerge when examining rules for in-house lawyers. In many cases responses reflected our concerns that there may be unnecessary regulatory restrictions on the practice of in-house lawyers. However, we are pleased to see that some of the regulators who currently impose additional regulatory restrictions are beginning the process to review their rules for in-house lawyers.