Posted by Iain Miller, partner at Legal Futures Associate Bevan Brittan
1. It’s shorter, but there are two. Gone are outcomes, indicative behaviours and the rather confusing definition of the word ‘you’ to mean just about anybody, depending on its context. However, there are now two codes, one for individuals and one for firms, again aimed at making it a bit clearer as to where responsibility lies.
2. We are now down to just six principles (from 10):
- Uphold the rule of law and the proper administration of justice;
- Ensure that your conduct upholds public confidence in the profession and those delivering legal services;
- Act with independence;
- Act with honesty and integrity;
- Act in a way that encourages equality, diversity and inclusion; and
- Act in the best interests of each client.
Gone from the principles are providing a proper standard of service to your clients, complying with your legal and regulatory obligations, running your business in accordance with proper governance and risk management principles, and protecting client money and assets. However, these obligations are still part of the code.
3. In-house solicitors will no longer be restricted to acting for just their employers. The arcane rules contained in rule 4 of the Practice Framework Rules will be removed. Any solicitor can provide legal advice to anyone as long as they are not carrying out one of the reserved legal activities set out in section 12 of the Legal Services Act.
In-house solicitors will be allowed to provide reserved legal activities to their employer and anyone else as long as they are not the public or a section of the public. If they are, then the entity through which they practice will need to be authorised.
4. Solicitors can set up in practice and call themselves solicitors without their entity being authorised as long as they are not providing reserved legal activities. Whilst these new firms will not have the same regulatory burden as regulated law firms – such as the need for minimum terms insurance – they will also not be able to call themselves a solicitor’s firm and may not have the benefit of legal professional privilege.
There is nothing to stop existing law firms from decanting their non-reserved legal services into these new less regulated entities provided they inform clients clearly.
5. The Solicitors Accounts Rules are going to be simplified. The complex definitions of client money and office money are to be replaced by a simpler definition of client money. There may be more flexibility around credit card payments and the use of escrow services rather than solicitors holding client money themselves.
6. More consultations are due and the changes are not likely to happen until the middle of next year.