The Solicitors Regulation Authority (SRA) has tempered its proposal to allow solicitors to set up their own law firms as soon as they qualify, as it unveiled the final wave of changes to its Handbook.
In announcing the outcome of the second phase of its ‘Looking to the future’ project, it has completed the two-year process of rewriting the handbook, which is set to be around 130 pages in total, more than 300 pages less than now.
Subject to the approval of the Legal Services Board, this will include a seven-page code of conduct for solicitors and six-page code for firms that describe the standards of professionalism that the regulator and the public expect of those the SRA regulates.
The underlying principle is to put greater trust in professional judgement; the codes strip out the current indicative behaviours.
The hope is that the new regime will come into force in April 2019.
Under the current rules, a law firm must have a manager who is ‘qualified to supervise’. They need to have undertaken SRA-specified training – 12 hours of management skills – and been entitled to practise for at least three years.
In a consultation issued last year , the SRA described this as confusing: “It conflates technical competence, supervision arrangements and running a business.”
The regulator said today that while the responses to the consultation confirmed this, “we were persuaded by feedback that – in addition to the other protections in place – there should still be a specific rule in this area”.
The SRA will introduce a rule that any firm it regulates will need at least one manager or employee with three years’ experience. That individual will be responsible for supervising the work carried out, but means that a newly qualified solicitor, or non-solicitor, can still set up a firm.
The first phase  saw the controversial change to allow solicitors to hold practising certificates and deliver reserved legal work from unregulated firms.
The second phase will allow freelance solicitors to provide reserved legal work too – this could be solicitors who retire from a firm but continue to work with a select number of clients, or women solicitors returning to work, or solicitors operating in a chambers-style arrangement.
They will need three years’ experience, as well as adequate professional indemnity insurance for all their legal work, not just reserved activities. They will not be able to hold client money or employ people.
Other changes in phase two include allowing Scottish and Northern Irish law firms to provide reserved services in England and Wales without having a practising address there, although they will still be subject to SRA regulation.
This “could potentially increase consumer choice”, the SRA said.
On the Solicitors Qualifying Examination, the SRA said it would permit candidates who have started to train before it comes into force – including starting a qualifying law degree but excluding apprentices – and who complete their training in the following 11 years, to be exempt from the requirement to qualify through the SQE.
In addition to changes to our phase 2 proposals, the SRA has also made some changes to the phase one proposals, most notably splitting into two the principle that solicitors must “act with honesty and with integrity”, so it is clear that matters of honesty and integrity can be separate issues. This has been a matter the courts have dealt with over the past year.
SRA chief executive Paul Philip said: “We have worked closely with the profession and the public to develop our proposals over the last four years, engaging with more than 35,000 people. I am pleased there was widespread support for our overall approach and that we received so much useful feedback.
“We are now ready to make the changes that are needed to modernise both our regulation and the legal market. Our reforms focus on what matters: the high professional standards that offer real public protection rather than unnecessary bureaucracy that generates costs, constrains firms and hinders access to legal services.
“We believe that the changes will make it easier for firms and solicitors to do business and to meet the needs of those who need their services.”