It has been revealed that the Solicitors Regulation Authority (SRA) will next month propose reforms to the separate business rule. Under the proposal, law firms would be permitted to allow non-lawyer professions in as partners without becoming a separate business entity.
With law firms looking to diversify and expand in the wake of a faltering sector, the reform is expected to grant added flexibility for firms competing with multi-disciplinary practices (MDPs). The SRA has suggested the changes are necessary to level the playing field, particularly as a recent revision has allowed MDPs to enter the legal services market without the burden of dual regulation.
In regard to the proposal, the SRA said: “Such changes will assist existing providers that do not wish to become alternative business structures (ABSs) to provide multi-professional services (for example, by taking on chartered accountants) and thus increase their market share.”
According to the Law Gazette, the proposal, which will mean traditional firms will be able to expand into previously unchartered territories, has been supported by many in the legal profession.
The SRA has also suggested that the reform will benefit consumers: “These changes will benefit consumers by providing greater compensation in the provision of legal services, greater opportunities to access holistic services and potential reductions in cost.”
However, the Law Society has voiced concerns about the proposed reform.
“Removing legal work from the SRA regulation where it is undertaken by an accountant within an ICAEW-regulated firm will create confusion with clients,” a spokesman for the Law Society said.
“Where a client is provided legal work by an SRA-regulated firm then they have a right to expect that work will be regulated to the same high standard regardless of the qualification of the individual providing it.”