Do not sacrifice small law firms in favour of unregulated sector, tribunal tells SRA

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27 October 2016


Technology: not all clients can use computers or can pay for legal services online

Technology: not all clients can use computers or can pay for legal services online

The Solicitors Disciplinary Tribunal (SDT) has launched a passionate defence of the sole practitioners and small law firms which “currently fill the consumer gap at competitive prices”, following the “passing away” of legal aid.

Responding to the Solicitors Regulation Authority (SRA) consultation on the new codes of conduct – and particularly the move to allow solicitors to practise from unregulated businesses – the SDT warned that it would be “throwing the baby out with the bathwater” if small law firms were “sacrificed as the price to be paid for an ideology that unmet consumer needs will be satisfied to an equivalent standard by the unregulated sector”.

The tribunal said: “Sole practitioners and SMEs form an essential reliable source of legal services for those who could be described as vulnerable.

“Such businesses are sufficiently flexible to be able to tailor their offering specifically to differentiated, often small, segments of the legal services market in ways that other regulated and unregulated entities are commercially unable and/or unwilling to consider.

“The clients of these firms do not always have easy access to technology, or have never been taught how to use the computer in their local library, assuming that the library has not been closed. They may not speak English as their first language.

“They may not be able to leave the house to travel to their nearest town to visit an alternative large legal services provider because of illness or age, or lack of available public transport routes or the bus fare.

“They may be consumers who do not have access to credit or debit cards because they are on benefits or in debt, or for religious or moral reasons, so cannot purchase legal services online. With the passing away of legal aid, high-quality sole practitioners and SMEs currently fill the consumer gap at competitive prices.”

The tribunal said it would also be “deeply concerned” if legal professional privilege (LPP) was put at risk by the new rules.

“LPP could be dealt a fatal blow by ill-drafted principles and codes that do not expressly protect the same. This is particularly important in relation to solicitor/client relationships within an unregulated entity.”

The tribunal called on the SRA to consider adapting the roles of COLP and COFA if solicitors were permitted to practise from unregulated firms.

“There may be benefit in terms of the public interest in requiring such solicitors to fulfil some or all of the duties of a COLP/COFA within that entity. This would also go some way towards levelling the playing field with sole practitioners who carry out reserved and non-reserved activities and who will remain subject to SRA regulation.”

The SDT advised against forcing regulated firms to provide detailed information about consumer protections. It argued that although this could be seen as a “positive marketing benefit”, making it a requirement would “merely add to the regulatory burden”.

Instead it suggested that either the SRA should “nudge” firms in the right direction, or the task should be left to the Law Society.

The tribunal warned the SRA that streamlining the rules “may have the unintended consequence of copious satellite documents, not held in one place, with which solicitors will have to familiarise themselves”.

The SDT described the status of the proposed guidance and case studies as “unclear and potentially confusing”, asking whether solicitors would “ultimately be prosecuted” for failing to follow guidance.

It said that removing the ‘qualified to supervise’ requirement for solicitors, to allow those with less than three years’ post-qualification experience to do the job, would increase risks.

“The tribunal is called upon to decide cases where the SRA has included an allegation of failure to supervise against a solicitor who under current rules will be of at least 36 months’ post-qualification experience.

“In the last 12 months the tribunal has reached decisions on five such allegations, with the outcome that three allegations were found proved beyond reasonable doubt, one allegation was found not proved, and one allegation was admitted by the solicitor. A further allegation was withdrawn by the SRA.”

The tribunal said that, “supported by its own empirical evidence”, removing the ‘qualified to supervise’ requirement would be “dangerous in terms of client protection and public confidence” in providers of legal services.

The SDT added that it was also opposed to the proposed removal of provisions under the Practice Framework Rules 2011 relating to pro bono work.

“The SRA has not produced any evidence to support the assertion that the current rules relating to pro bono work are preventing the private sector from ‘properly delivering corporate social responsibility programmes’.

“It is not clear what protection, if any, the SRA intends to put in place for consumers receiving pro bono work.”



One Response to “Do not sacrifice small law firms in favour of unregulated sector, tribunal tells SRA”

  1. The SRA want this outcome so thy can ditch their workload just they are ding in changing the CPD system. They believe bigger firms are less risk and so their life is easier -transparently obvious.

  2. Richard Gray on November 2nd, 2016 at 5:21 am

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