The Solicitors Regulation Authority (SRA) has so far received more alternative business structure (ABS) applications than it expected, chief executive Antony Townsend admitted yesterday.
Speaking at the 360 Legal Group’s mergers and acquisitions summit in London, Mr Townsend also suggested that there will in time be growing momentum towards consolidating the eight current legal regulators into one.
The SRA has received 96 stage 1 ABS forms – an expression of interest in starting the process – since the form went live on 3 January. Most of the firms have now been sent bespoke stage 2 forms where the detail of the ABS is spelled out.
Mr Townsend said the SRA had expected far fewer applications, describing the number received so far as “very interesting and encouraging”.
“However, we’ll have to wait and see if the numbers of stage 1 applications we receive is consistent with the number of actual ABS we eventually regulate. We have an authorisation process that is very rigorous, so 96 applications doesn’t necessarily translate into 96 organisations being regulated as ABS.”
Mr Townsend was cagey as to when the first licence would be announced, saying he hoped that straightforward applications could be processed in a few week
s. The SRA has up to six months to consider applications, with a possible three-month extension in particularly complex cases.
Asked what the SRA would do if a large retailer offered legal services as a loss leader and started distorting the market, Mr Townsend said there remained an unresolved question as to the role of legal regulators in ensuring access to justice. If it appeared that the way the market was developing was reducing access to justice, the SRA would at least want to discuss it with the Legal Services Board and competition authorities, he suggested.
He said that a single regulator for the legal profession is “probably the direction in which we are headed rather gently… As we see the market in law consolidating and new entities that are less based on the eight existing ‘streams’ and a more multi-disciplinary, we will get to a place where the current regulatory model looks over-complex”.
Mr Townsend estimated that in three to five years, “people will start asking if it should be rationalised”, adding that he would want the SRA to be single regulator.
Speaking at last April’s Legal Futures conference, SRA chairman Charles Plant indicated his view too was that the eight regulators may in time become one.
Mr Townsend told delegates that he was “hopeful” that all firms would meet the deadline of 31 March to appoint their compliance officers for legal practice and for finance and administration, but would not go so far as to say he was confident.