Regulator not expecting ABS 'deluge'
Only a small number of law firms and other organisations will be applying to become alternative business structures by ABS day, the Solicitors Regulation Authority has predicted.
Only a small number of law firms and other organisations will be applying to become alternative business structures by ABS day, the Solicitors Regulation Authority has predicted.
The SRA has had a reasonable number of informal enquiries from a variety of entities either in or seeking to enter the legal services market, ranging from local law firms to private equity, but executive director Samantha Barrass said the regulator 'did not expect a deluge' of applications.
The regulator has said it would start issuing authorisations from 6 August, allowing authorised entities to operate as ABSs from 6 October.
But based on current levels of interest the SRA anticipates that only a few organisations will be interested in joining the pioneer fray on ABS D-day.
Instead, Barrass said, it was more likely that the bulk of early applications would take place around May next year after a period of observation, once firms have had the opportunity to assess the workings of the process.
According to Barrass, firms that have approached the regulator with ABS queries wanted to discuss how they could set up an ABS, ownership requirements and the number of solicitor owners, and the ownership suitability test.
This latter issue is one the SRA is focusing on particularly closely in the run up to ABS day following concerns that foreign criminals could take over English law firms.
Chief executive Antony Townsend said criminality within the profession was a serious issue which the regulator already dealt with regularly in the present regulatory environment.
He nonetheless confirmed that the SRA would step up rules on ownership requirements, refusing, for instance, to recognise as suitable qualifications obtained in jurisdictions that did not offer the same guarantees of professional integrity.
The SRA is in the process of applying to be an ABS regulator and will finalise its application on Tuesday 15 March ahead of a discussion with the Law Society on 23 March.
Society president Linda Lee has voiced concern on behalf of some members of the profession that the SRA may not be in a position to regulate ABSs. She has warned that the regulator must provide the society's council with evidence that it will have robust systems in place.
Lee has also said that having the SRA as a single regulator for ABSs and traditional law firms would be a way of ensuring a level playing field.