LSB to consult on regulation of sole practitioners

The Legal Services Board is to consult on changes to the Solicitors Act 1974 to bring the regulation of sole practitioners into line with the regulation of other law firms and ABSs.

The ‘anticipated launch date’, according to the LSB’s website, is next month but a spokesman said this depended on when information was received from the SRA. The aim is for sole practices to be indefinitely authorised as a recognised bodies from 31 March 2012 rather than sole practitioners having their PCs endorsed every year. Existing sole practitioners would be passported on that date into the new regime.

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 are currently a variety of business models,” the SRA said. “At one extreme the term ‘sole practice’ can mean an individual practising with little or no other support, undertaking, and personally providing, a limited range of services to a relatively small client base.

“At the 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.

“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 it had “always held the view” that sole practice constituted a type of firm and the order would enable it to regulate such firms more effectively.

A spokesman for the LSB said: “We have to consult on the draft statutory instrument before we can make a recommendation to the Lord Chancellor to allow for the modification of the SRA’s regulatory functions.

“At this point in time it is not clear when we will be able to publish the consultation. We cannot start this consultation before we receive the necessary information from the SRA and at this moment in time we haven’t as yet received it.”

A spokeswoman for the SRA responded by saying that the regulator was "keen to proceed" with the proposals, which would bring sole practitioners in line with our other firms.

"If the order, which is needed to bring these proposals into effect, is made, then the main changes will come into force at a time which is considered to be most appropriate for all parties."

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