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SRA announces detail of regulatory reforms

We have finalised the package of reforms designed to provide solicitors and law firms with greater flexibility over how they operate, making legal services more accessible to the public.

Developed over a four-year period, our Looking to the Future programme has been informed by four major public consultations, with more than 35,000 members of the public, the profession and wider stakeholders getting involved.

The reforms are underpinned by a simpler and easier-to-understand set of Principles, Codes and rules for solicitors and law firms, which at 130 pages is more than 300 pages shorter than the existing Handbook. Focussing on high professional standards, this will get rid of unnecessary and complex rules which constrain law firms and drive cost rather than consumer protection.

Changes being introduced, on a phased basis from 2019 onwards, include:

  • Creating separate Codes of Conduct for firms and solicitors and simple Account Rules that focus on keeping client money safe.
  • Freeing up solicitors to carry out ‘non-reserved’ legal work working within a business not regulated by a legal services regulator. Such solicitors would be bound by our Code, as are all solicitors regardless of where they work, would not be able to hold client money and would not be required to have indemnity insurance. They must also make clear to the users of their services exactly what protections are in place, including not providing access to the SRA Compensation Fund.
  • Allowing solicitors to provide reserved legal services on a freelance basis. Freelancers would not be able to hold client money or employ staff and must have appropriate indemnity insurance. They must also explain to clients what regulatory protections apply.
  • Introducing a new enforcement strategy, providing greater clarity on when and how we would take action against a firm or solicitor.

We have also published a series of Better Information reforms, designed to improve the public’s access to legal services by making information on law firms’ prices, protections and services more readily available. These are due to be introduced from December 2018 onwards.

Overall feedback on our plans has generally been supportive, especially around creating simpler rules, reducing bureaucracy and improving public access to legal services.

In other areas we have listened to concerns and made changes to its original proposals, including:

  • Retaining and clarifying rules requiring solicitors running a firm – or going freelance – to have at least three years’ experience.
  • Dropping proposals to publish data about client complaints to firms, because of the need for contextual information.
  • Amending plans around definitions of client money, so that the vast majority of firms can continue to operate as they do now, avoiding unnecessary costs.

Paul Philip, SRA Chief Executive, said: “We have worked closely with the profession and the public to develop our proposals over the last four years, engaging with more than 35,000 people. I am pleased there was widespread support for our overall approach and that we received so much useful feedback.

“We are now ready to make the changes that are needed to modernise both our regulation and the legal market. Our reforms focus on what matters: the high professional standards that offer real public protection rather than unnecessary bureaucracy that generates costs, constrains firms and hinders access to legal services. We believe that the changes will make it easier for firms and solicitors to do business and to meet the needs of those who need their services.”

The regulatory reforms will be submitted to the Legal Services Board for formal approval over the coming months.

Ahead of implementation, we will be working closely with the profession to prepare for any changes.

Further information on Looking to the Future is available here:

Go to the Looking to the Future page

Further information on our Better Information project consultation is available here:

Go to the Better Information consultation