In a significant relaxation of the rules of practice, the Legal Services Board (LSB) approved division plans by the Solicitors Regulation Authority (SRA) to allow lawyers of unregulated companies to offer legal services without qualification.
Basically, allowing lawyers outside the SRA’s control to offer services means consumers could not have any guarantees on insurance or indemnity payments.
However, liberalization is a big boon for lawyers in unregulated organizations, who will save money on overhead costs without having to purchase professional liability insurance.
Graham Reid, a legal regulatory partner at CPP, said Legal Affairs that the change “has presented exciting opportunities for in-house lawyers and for all those who wish to compete with large law firms at a much lower base cost”. He added: “It’s a giant opening for competitive forces.”
LSB President Dr Helen Phillips said she recognized the “potential risks” in the rule change but ultimately welcomed the move, citing the benefits for access to justice and promoting competition.
But a statement by the Legal Services Consumer Panel gave LSB and SRA the responsibility of ensuring consumers “understand any concomitant reduction in consumer protection.”
He continued, “There should be no ambiguity in the communication to consumers prescribed by the SRA, in order to ensure consistency in messaging and standardization.”
Law Society President Christina Blacklaws described the rule change as “a big mistake”. She added: “A main street where different levels of lawyers, with different levels of protection, offer the same services to passers-by, will make it more difficult for people who need legal advice to make informed choices, often at times. very traumatic in their lives, such as divorce and bereavement. Flexibility for practitioners should never come at the expense of protection and clarity for consumers. “
The upheaval in unreserved legal activities is part of a further overhaul of the SRA manual, which will now come into effect in April 2019. This lean version includes two separate codes of conduct: an individual lawyer code and a code business. In June, Bar policy adviser Marzena Lipman warned that the new codes would be “less detailed” and “will not have the results or behaviors indicative” of the existing code. The existing accounting rules have also been simplified and shortened.
As the SRA pushed its latest reforms, it also announced yesterday (November 6) an internal reshuffle that will see the departure of Executive Director Crispin Passmore at the end of the year.
Passmore has been with the SRA since joining the LSB in 2014, but will use his departure to take off before deciding on his next career change.
He has played a key role in the SRA’s education reform programs, such as the proposed Lawyer Qualifying Examination (SQE) implementation proposal. In his absence, Richard Collins will lead policy, education and anti-money laundering matters while Robert Loughlin will handle law enforcement work.
SRA CEO Paul Philip commented: “Over the past five years, Crispin has played an invaluable role in ensuring that we regulate in a way that maintains trust in the profession, while helping to create a modern and open legal market that benefits the public. “