Solicitors in not-for-profit advice services

Simon Pugh on the LegalVoice website has posted an article about the status of solicitors practising in not-for-profit (NfP) advice services.

NfPs that employ solicitors have been able to do so because of an exemption in the Solicitors Regulation Authority (SRA) Practice Framework Rules, allowing employed solicitors to act for the public if they do so from a NfP that does not charge its clients for their services. Without it, NfPs would only be allowed to practice from traditional firms (and more recently legal disciplinary practices and multidisciplinary practices).

The Legal Services Act 2007 created a new regulatory regime for legal services, allowing lawyers to practice both in traditional ways and in other, non-lawyer owned, business models. Thus, there is no longer a need for an exemption for NfPs. However, the flip side is that any organisation that employs solicitors has to be regulated, either as a solicitors firm or as an Alternative Business Structure (ABS).

Currently only the Solicitors Regulation Authority can license ABSs wanting to do litigation and advocacy. So any NfP that employs solicitors to provide reserved legal activities (primarily conducting litigation and exercising a right of audience in the courts) will have to become licensed and regulated by the SRA.

The Legal Services Board is currently consulting on when to extend the ABS regime to special bodies, and what regulation should look like when it does. It is proposing regulation from April 2014, meaning any NfP that employs lawyers will have to be licensed as an ABS by then. The SRA’s rules allow them to take six to nine months to consider an application, and the application itself is very detailed, so to be licensed by April 2014 an application would have to be ready to submit by late summer 2013.

The consultation closes on 16 July, you can find more information here, as well as a link through to the consultation: Regulation, ABSs and NfPs