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Legal innovators urge peers to overcome fear of breaching regulatory rules

SRA reforms will make legal service delivery in unregulated firms ‘much easier’ in future

27 April 2017

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Early legal innovators have urged fellow solicitors to overcome concerns over possible breaches of regulatory rules, to start thinking differently, and to explore the opportunities offered by technology.

Employment specialist Camilla Palmer QC (Hon), principal solicitor at Palmer Wade, set up Your Employment Settlement Service (YESS) in 2014 to provide affordable dispute resolution services to employees and employers.

At a time when alternative business structures were the mainstream alternative model to partnerships, YESS was set up as a not-for-profit charity. It hasn’t been the only initiative to go down that route. Among the pioneers are charity-owned law firm Castle Park Solicitors and not-for-profit law firm Saltworks, set up by the Anti-Trafficking and Labour Exploitation Unit (ATLEU) in February this year to generate funds for its victim support work.

Meanwhile, a group of law centres in the South West are also launching community interest company Cabot Law to fund solicitor positions in their local area.

But despite more lawyers coming up with innovative projects, too many firms were behind the times, Palmer suggested: ‘Innovation takes many different shapes, but it’s ultimately about improving services and delivering better service to clients, and having a happy client. And a happy client means more clients.’

Unveiling YESS’s new digital pathway for clients at the SRA’s Innovate conference yesterday, Palmer said technology would help increase efficiency, fulfil unmet needs, and be more competitive.

Comparing the forthcoming YESS Online platform to the Siaro platform developed by Brighton-based firm Family Law Partners, Palmer said users would be guided through a succession of questions. This would allow the system to generate a rough report on the potential for a claim, with suggestions about the next steps depending on users’ objectives – whether it’s keeping their jobs or securing more compensation.

The project has received scoping funding from the Legal Education Foundation. If it goes ahead, the platform will provide advice to users willing to take matters further on their own, or it will give them the option to seek further assistance from a YESS solicitor for a fixed price. At that point, the solicitor will already have collected enough information about the client to have a meaningful conversation.

Palmer’s other innovation bête noire is lack of price transparency. ‘It’s one of the big issues,’ she said. ‘It’s difficult for us lawyers to agree a fixed fee but it’s so important for clients. We have our fees [£175 per hour] on our website, it’s totally transparent. It’s a practice more lawyers should adopt.’

As easy as it appears now, setting up YESS didn’t happen overnight. ‘We had long conversations with the SRA. They were a bit bemused, and we took legal advice twice, from two different firms, about what we could do without falling foul of the regulator, but we got there in the end.’

As a charity, YESS is treated as a ‘special body’ for regulatory purposes. This choice of structure means it didn’t need to be authorised as an organisation, but its solicitors are authorised to advise members of the public.

Many innovators are happy to work with the current rules – using the ABS model, for instance. Claire Larbey, risk director at Eversheds Sutherland and co-founder of several ABSs, suggested the model offered flexibility. But before setting up as an ABS, firms needed to think about the reasons and about the skills this would allow them to bring in which they otherwise wouldn’t be able to. ‘This is about meeting the needs of clients first,’ she said during a panel debate.

Likewise, Ty Jones, corporate social responsibility director at DWF, said innovation was ‘not about being first but about doing what you do well’, and for Drew Winlaw, co-founder of Wavelength Law, innovation was ‘evolutionary’ and required firms to take time educating their workforce.

Others, however, are still waiting on the SRA to relax its authorisation rules so they can set up non-traditional structures without having to apply for waivers. They include Yuzu Law’s founder Robin Saphra, former in-house counsel with several telecom companies who set up an outsourcing business for in-house departments.

In its current set up, Yuzu employs solicitors transferred from their organisations, who are then assigned back to the business on a project basis. He would like to deploy them across a number of other companies and projects but this isn’t possible under the current rules.

Jonathan Gauton, a solicitor and chief executive of business advisory firm Outset, also wants to hear from the SRA about more flexible structures that would allow his company to bring the law firm it created under the same roof.

Policy director Crispin Passmore gave a renewed commitment that plans to allow solicitors to work in unregulated businesses were going ahead, despite lingering concerns over ethics and potential conflict. YESS was ‘one of the many examples within our rules where solicitors are able to deliver legal services to the public outside regulated law firms – our reforms will make that much easier in the future,’ said Passmore.

Professional indemnity is another issue. Passmore suggested that while PII levels are likely to be significantly lowered for regulated businesses, the requirements for solicitors in unregulated organisations would probably be a lot higher, reflecting the risk borne by the organisation.

Jean-Yves Gilg is editor in chief at Solicitors Journal

jean-yves.gilg@solicitorsjournal.co.uk | @jeanyvesgilg

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