On 26th November 2015 the SRA published a position paper setting out their thoughts on their regulatory direction of travel. The link is here. The key proposal is a simple one. The SRA will bring its regulatory framework fully in alignment with the Legal Services Act. The SRA intends that in future there will be three types of legal businesses:
- completely unregulated legal businesses;
- unregulated legal businesses that have regulated solicitors working in them who provide unregulated legal services to the public;
- fully regulated law firms
The SRA's existing restrictions mean that the middle option does not currently exist. However, this option will in a number of circumstances be the best way to structure a legal business. A substantial amount of the services provided by existing law frims are unregulated. I have previously blogged about the scope of regulation here. Many law firms may wish to run some of their unregulated business through a more flexible business model. For other professional services firms such as accountants they will be able to employ solicitors and hold them out as giving legal advice without themselves seeking SRA authorisation. For in house legal teams they will be able to sell their services more widely.
How this would work in practice is to be the subject of future consultations but anyone involved in legal services or wishing to become involved should start thinking now about how this could affect them.