What the new SRA Standards and Regulations mean for sole practitioners20/01/2020
The launch of the new Solicitors Regulation Authority (SRA) Standards and Regulations in 2019 opened the doors for sole practitioners to trade without friction.
Publishing new guidance in November, the regulator explained how solicitors can prepare to become a sole practitioner or an SRA-regulated freelance solicitor.
Following the regulatory reforms, solicitors practising alone can now offer some services without the umbrella of a recognised sole practice (RSP). This is opposed to previous rules, where sole practitioners must have had their practice authorised as an RSP, regardless of services offered.
Note, sole practitioners providing immigration, claims management or regulated financial services, and who are not regulated by another suitable regulator, will still need to operate under an RSP.
Likewise, only sole practitioners who meet the definition of a freelance solicitor can operate without authorisation. To qualify, a freelance solicitor must be:
- Practising on their own, and does not employ anyone else in connection with the services they provide.
- Practising in their own name (rather than under a trading name or through a service company).
- Engaged directly by clients with fees payable directly to them.
To provide unauthorised reserved legal services, you must also:
- Have practised as a solicitor for a minimum of three years since admission or registration.
- You are self-employed and practise in your own name, and not through a trading name or service company.
- This also means, for example, that you cannot be practising in a partnership, as a consultant on behalf of someone else, or through a limited company.
- You do not employ anyone in connection with the services that you provide.
- You are engaged directly by the client, and the client pays their fees directly to you.
- You have a practising address in the UK.
- We have issued separate guidance on this obligation and on your duty to inform clients that they will not be covered by insurance on the SRA’s minimum terms and conditions and that alternative arrangements are in place.
- You only hold client money when it is for payments on account of costs and disbursements that you have not yet billed where:
- any money held for disbursements relates to costs and expenses incurred by you on behalf of your client and for which you are liable, and
- you have told the client in advance where and how that money will be held.
Sole practitioners must also comply with sector-wide standards, such as publishing costs information for relevant services and details of your complaints’ procedure, as well as follow anti-money laundering regulations.
For help and advice setting up and running your sole practice, get in touch with our expert legal finance team today.