Duncan Lewis

Residential Property

Commercial Property

Sole practitioners would come under the same regulations which guides firms and ABSs

Date: (22 November 2012)    |    

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The changes to regulation of sole practitioners into the line with the regulation of other law firms and ABSs to be made in the Solicitors Act 1974 is going to be consulted by the Legal Services Board (LSB)
The LSBs website has said that the launch date could be anytime next month but a spokesman said that it depended on when information was received from the SRA.
The aim is to authorize the sole practices as recognised bodies indefinitely from 31 March 2012 rather than sole practitioners having their PCs endorsed every year. Existing sole practitioners would be allowed into the new regime from that date onwards.
The change would be made by a recommendation of the LSB to the Lord Chancellor under section 69 of the Legal Services Act, and implemented through a statutory instrument.

A consultation on the change by the SRA closed in March 2011. In its consultation paper, the regulator said the nature of sole practice was evolving and there was no “substantive justification” for a separate authorisation regime on the grounds of the business model of sole practices.

There were currently a variety of business models, the SRA said. The ‘sole practice’ in its extreme sense could be described as an individual practicing with little or no other support, undertaking, and personally providing, a limited range of services to a relatively small client base.

And at other extreme, however, the sole practitioner may control a substantial enterprise, supervising a large number of fee-earners and other staff who provide a wide range of services to an extensive client base, with a considerable turnover and large client account balances.

The latter model had was more similar to a medium sized partnership or incorporated practice rather than with the perhaps more general perception of sole practice being a one man band.

This latter model has more features in common with a medium-sized partnership or incorporated practice, rather than with the perhaps more general perception of sole practice being a ‘one man band’.

The SRA said that it always considered sole practice a type of firm and the order of change to the regulations would make it regulate such firms more effectively.

A spokesman for the LSB said that it had to consult on the draft statutory instrument before it could make a recommendation to the Lord Chancellor to allow for the modification of the SRA’s regulatory functions.

He added that the time of publishing the consultation would happen only after the SRA would give necessary information which it is yet to receive and start the consultation and publication would happen once things would be clear.

 

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