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Law Society and SRA clash over proposals that could see junior solicitors run their own unregulated firms

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Sensible move or recipe for disaster?

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The Law Society and the Solicitors Regulation Authority (SRA) are at loggerheads over proposed regulatory changes that would give newly qualified (NQ) lawyers the chance to run their own firms.

If SRA plans are given the green light, solicitors — from the point of qualification onwards — would be able to set up their own unregulated firm, while still being able to rightly describe themselves as a solicitor.

Under current rules, solicitors must either practise within a regulated firm or refer to themselves as “non-practising” when working within an alternative legal business.

And, if the plan goes ahead, there’s even more good news for NQ lawyers: unregulated firms do not require costly professional indemnity insurance, and the move would circumvent rules requiring solicitors to have at least 36 months experience under their belts before going it alone.

But, before trainees start eyeing up office space for when they qualify, there is a catch.

According to the proposals, reserved legal activities will still be off limits. This means — as stated in s12 of the Legal Services Act 2007 — young lawyers opting to go it alone would not be allowed to exercise rights of audience, conduct litigation, undertake probate work or administer oaths.

Despite this, as you can probably imagine the latest proposal hasn’t gone down well with Chancery Lane bigwigs.

Law Society chief executive Catherine Dixon has suggested the move could have “serious implications”. Claiming the SRA could create a two-tier profession, “those working in a regulated entity and those who are not”, she said:

We are concerned that this will put clients at risk as they simply won’t know what protection they are getting when they instruct a solicitor.

Firing back, a spokesperson for the SRA told Legal Cheek:

Our proposals are about making sure regulation stays up to date in the modern legal services market, increasing access to justice and choice for consumers and providing flexibility for firms. The proposals will also open up greater opportunities for solicitors.

Dismissing Dixon’s claims, the spokesperson continued:

Our proposals will not create two tiers of solicitor — all will be subject to the same education and training and high professional standards as is the case now. There will, of course, still be both regulated and unregulated firms in the market, as there are now.

The SRA-led consultation closes on the 21 September.

Read the SRA’s consultation paper in full below