More than 10 prospective alternative business structures (ABSs) completed the first stage of the Solicitors Regulation Authority’s (SRA) application process on the first day, the authority has revealed.
SRA figures show that it will spend a minimum of three days considering applications.
Applicants have to submit basic information – including the names of the ABS’s compliance officers – in stage one to receive the substantive application form, which one leading consultant told Legal Futures is “hardly helpful for those either advising or trying to plan an application in advance”.
However, the SRA says its ABS team will “assess the information received and create a bespoke application pack for that organisation. The bespoke pack comprises specific additional forms to gather information depending on the size and nature of the organisation”.
Some potential ABSs have helped the SRA pilot the application form in recent months.
Ann Morgan, who manages the team, added: “The bespoke forms are necessarily very detailed and aim to obtain significant amounts of information from the applicants…
“If we have to engage in further dialogue with firms, they shouldn’t worry or think they’ve done anything wrong. It’s probably going to be standard practice for everyone. What we do know is that we have to be rigorous and robust – as robust as we are with traditional law firms.”
The SRA will then determine the application fee. This will be made
up of an initial payment of £2,000 (based on a day rate of £600 and includes a contribution towards the initial costs of the appellate body, the Solicitors Disciplinary Tribunal (SDT)) and a payment of £150 in relation to each candidate who needs to be approved as a manager, owner and/or compliance officer.
If the SRA’s costs in considering the application exceed these, they will be charged at a day rate of £600. If the SRA has to seek external assistance, it will be charged in full to the applicant body. However, existing legal disciplinary practices with at least one non-lawyer partner – which will have to become ABSs – will not have to pay a fee.
The SRA has up to six months to make a decision, extendable by a further three months. All decisions will be taken by a member of the SRA’s senior management team.
Any appeals against ABS decisions will be managed internally by the SRA in the first instance and ultimately heard by the SDT.
Meanwhile, Law Society president John Wotton said the SRA becoming an ABS licensing authority is important for all solicitors, whether or not they chose to adopt the new business model.
He explained: “The legal profession in England and Wales is the most respected and competitive in the world because it has matched high standards with an approach which welcomes new entrants and business models. This is in the interests of the strength of the profession as a whole and of England & Wales as the leading jurisdiction in the world.
“ABS can provide new opportunities and growth for law firms, but equally those not seeking to adopt ABS have an imperative to be more competitive, accessible and innovative.”
- Anthony Isaacs, the past president of the SDT and former senior partner of City law firm Stephenson Harwood, received an MBE in the New Year Honours List for services to the legal profession.