Exclusive: Rocket Lawyer receives waiver to employ solicitors

Edwards: Six months to find indemnity insurance

Unregulated online legal services company Rocket Lawyer has received a waiver to allow practising solicitors to advise its clients, Legal Futures can reveal.

It may in fact have beaten employment business Croner to the punch. We reported earlier this month that Croner was the first to receive such a waiver from the Solicitors Regulation Authority.

Peninsula – the business services giant that owns Croner – has its own waiver, and is highlighting to potential customers the benefits of privilege that come with it, we can also report.

Mark Edwards, senior vice-president and general manager of Rocket Lawyer UK, said its three consultant solicitors advised their first clients last month.

He said he had been speaking to the Solicitors Regulation Authority (SRA) about the possibility of offering regulated advice “for a couple of years”.

Last summer, the SRA’s board approved a rule change allowing solicitors to practise from unregulated firms, but it is not expected to be introduced until late 2019.

But the regulator has been offering waivers to unregulated firms in its innovation ‘safe space’.

Mr Edwards said that until last month, his firm used paralegals to provide simple legal advice, having obtained SRA approval.

Rocket Lawyer, an established American brand, launched in the UK in 2012.

Mr Edwards said Rocket Lawyer’s main focus was providing families and businesses with legal help by using automated technology to create contracts and other documents.

If more complex advice is needed, clients are referred to Rocket Lawyer’s panel of six law firms.

Mr Edwards said the firm’s workload was expanding rapidly, meaning that he was looking not only for more law firms to join his panel, but also for solicitors to employ.

“We go after families and small businesses who have often never had legal advice before. Most of our business and individual customers are first-time users of legal services. We target unmet need. People find us online, where we are good at marketing.”

Mr Edwards said Rocket Lawyer applied to join the SRA’s innovation space and for the waiver in August 2017.

The waiver was granted in October 2017. However, Mr Edwards said it took six months for the firm to get professional indemnity insurance.

“The insurance companies are struggling to understand the new opportunities to provide legal advice,” he said.

Mr Edwards said 80% of Rocket Lawyer’s work was business-related. “This is a technology firm, not a law firm. That requires solicitors who are passionate about technology and who want to automate the provision of legal advice.”

Last week, in the wake of our story about Croner, the Law Society accused the SRA of relaxing the rules on practising from unregulated firms without proper scrutiny.

Vice-president Christina Blacklaws said: “Ad hoc regulation is no regulation at all. This waiver of the usual rules for one particular company allows a fundamental change to the regulatory framework by the back door.

“This is a change which has been widely opposed by both the profession and consumers.

“A rule change with such far-reaching consequences for client protection should be reviewed by the Legal Services Board to ensure it doesn’t harm the public interest before being introduced.”

A spokesman for the SRA replied: “We will only grant waivers where there is clear evidence that they are in the public interest, and that users of legal services are protected.”

Peninsula’s website says that customers who contact its advisory or legal services departments will be assisted by employment law specialists, some of whom are employed solicitors and they are individually regulated by the SRA.

It says users unhappy with the service received from one of the solicitors should tell Peninsula but can also contact the SRA “to raise any concerns that you have with them and they will investigate”.

“Alternatively, you can contact the Legal Services Ombudsman [sic].”

It continues: “Although Peninsula as a whole is not a regulated business, the work of our individual solicitors is regulated by the SRA. This means that where you take legal advice on a matter directly from one of our solicitors, this will attract legal advice privilege.

“The Solicitors Compensation Scheme is not available in relation to claims against our solicitors but their work is covered as part of our professional indemnity insurance.”

Back in 2015, Peninsula said its interest in becoming an alternative business structure had been scuppered by the SRA’s rules at the time.

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