The Solicitors Regulation Authority’s (SRA) new rulebook will come into force on 25 November 2019, some six months later than originally expected.
The regulator said the delay would give solicitors time to prepare for the new SRA Standards and Regulations (S&R).
Supporting guidance will be issued over the coming months.
The most controversial aspect of the S&R allows solicitors to provide unreserved services to the public from unregulated businesses.
It also permits individual self-employed solicitors (freelancers) to provide reserved legal services without being authorised as an entity.
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.
The S&R is 130 pages in total, more than 300 pages less than now. It includes 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.
Other changes include requiring any firm the SRA regulates to have 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 set up a firm.
Scottish and Northern Irish law firms will be allowed 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 has said.
New accounts rules would simplify the current set-up, introduce a new definition of client money and include rules on the use of third-party managed accounts.
November will also see the SRA Digital Badge becoming a mandatory requirement for all regulated firms that have a website.
SRA chair Anna Bradley said: “Our new regulations place a sharp focus on the high professional standards that we and the public expect, while allowing solicitors greater freedom in how they deliver their services.
“By stripping away outdated and unnecessary rules and giving solicitors more flexibility to design and deliver their services around their clients, our new regulations are designed to help people access a wide range of high quality services with the confidence that proper protections are in place.
“That can only be good for both the public and the profession.”
In a further announcement, the SRA has revealed that it is to write to an initial sample of 400 firms asking them to demonstrate compliance with the 2017 Money Laundering Regulations.
It said it wanted to make sure that firms have a money laundering risk assessment in place and were implementing it.
“A risk assessment is required by legislation and should be the backbone of a firm’s anti-money laundering approach.
“If firms are not complying, they will go into the regulator’s enforcement processes. Each case will be judged on its facts, but if there are serious issues or a lack of willing to resolve issues promptly, the SRA will take disciplinary action.”
The SRA also plans to carry out further compliance checks if it finds that there are sector-wide issues.
A spokesman said this activity follows on from both its own work in this area and the concerns which have been expressed by others, such as the government and the Office for Professional Body Anti-Money Laundering Supervision (OPBAS).
At the start of the year, the National Crime Agency said that lawyers were making fewer suspicious activity reports .
The spokesman said there was no obvious reason for this, especially as reports from other sectors were increasing.
“We will continue to work with other agencies, such as the National Crime Agency, to make sure solicitors understand their obligations in this area.”
The SRA has also confirmed what will happen to non-UK solicitors wanting to qualify in England and Wales in the event of a no-deal Brexit.
Under current legislation, EU lawyers are able to apply for exemptions on a topic by topic basis from the qualified lawyers transfer scheme (QLTS), which all foreign-qualified lawyers must sit to qualify in England and Wales.
No such exemptions are currently offered to lawyers from beyond the EU.
But if the UK leaves the EU without a deal and falls into World Trade Organisation rules, this would have to change, as it would no longer be possible to offer preferential treatment to EU lawyers.
In this situation, all foreign lawyers would be able to apply for exemptions, but these would only be offered on the basis that they covered the entirety of either or both parts of the QLTS.
Whether exemptions are granted will continue to depend upon a case-by-case review of that lawyer’s qualifications and experience.
EU-based lawyers wishing to apply under the current exemptions regime can still do so, providing their application is received before the date any no deal Brexit becomes effective.
Whatever the outcome of the Brexit negotiations, arrangements for solicitors from Scotland and Northern Ireland will continue unchanged.