SRA’s “flexible” approach to MDPs backed by LSB

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24 October 2014

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SRA: New approach driven by risks posed

The Legal Services Board (LSB) has backed a new “flexible” approach by the Solicitors Regulation Authority (SRA) aimed at making it easier for multi-disciplinary partnerships (MDPs) to become licensed as alternative business structures.

The changes, approved at last month’s SRA board meeting, mean that unreserved legal activities which are “subsidiary but necessary” can be excluded from the description of the regulated activity on the licence.

In a policy statement the SRA said its approach to unreserved activities would be “flexible” and driven by the risks posed.

“Where the non-reserved legal activity is performed as a subsidiary but necessary part of the activity of a non-legal professional (whose main activity does not involve the provision of legal advice or services), then subject to any risks posed in the particular case we will generally be prepared to agree to exclude this from the description of the SRA-regulated legal activity on the licence.

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“Examples could include an IT consultant whose work may from time to time involve ‘legal activity’, such as providing advice on installing a new IT system that includes compliance with data protection legislation, or a human resources consultant who designs new disciplinary systems for firms which need to include procedures that are compliant with equalities legislation.”

The SRA said the MDP as a whole would be required to comply with the SRA principles, including a duty to ensure that the matters would be referred to an authorised individual when it is in the client’s interests.

Paul Philip, chief executive of the SRA, said: “The changes should pave the way for other potential MDPs to come forward and offer reserved legal activities alongside other professional services.

“This is an important milestone in our reform programme, increasing competition and encouraging growth in the legal services market.”

The changes will be made through amendments to the SRA handbook at the end of the month.

In its latest quarterly report, released this week, the SRA has said that 32 ABS licences were granted in the three months to the end of September 2014.

This represents a fall from the 40 granted in the previous quarter, but is in line with the one before, at 31. The numbers of applications received and completed, 29 and 28, were little changed in the third quarter of this year.

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