SRA unveils pathway to ABS 'big bang'
A new 'outcomes-focused' approach will provide more effective regulation for law firms big and small, the Solicitors Regulation Authority announced as it launched 'Freedom in Practice' last week, the project which sets out the regulator's pathway to the opening up of the legal services market to ABSs in October 2011.
A new 'outcomes-focused' approach will provide more effective regulation for law firms big and small, the Solicitors Regulation Authority announced as it launched 'Freedom in Practice' last week, the project which sets out the regulator's pathway to the opening up of the legal services market to ABSs in October 2011.
The new regime, the SRA says, will be risk based, with a set of core principles leaving firms to identify how best they can achieve compliance.
Two consultations will take place in parallel. The first will canvas lawyers and consumers about how the proposed 'outcomes-focused regulation' would operate. The second will address the issue of licensing of alternative business structures and the re-casting of the Code of Conduct.
Both consultation documents will be published on 28 May, with a view to finalising the new Code by April 2011. The new rules are scheduled to come into force on 6 October 2011, the date which the regulator has set as its 'big bang' for ABSs.
According to chief executive Antony Townsend, the OFR approach will also bring a tightening of the conditions of entry into the profession and more careful monitoring of firms before they start heading towards the assigned risks pool.
'The aim is to identify problems earlier, with new firms in particular, and make sure they are fit to be legal practices before they are about to fall into the ARP,' said Townsend.
'The SRA should be less like Accident and Emergency, and act before a firm turns up at the hospital,' he added.
Samantha Barrass, the SRA's new corporate regulation project director, said the proposed risk-based approach and outcomes-focused regulation would push risk management more onto the firms themselves.
The more firms could demonstrate they had good risk management mechanisms in place, the lighter regulation would be, she said.
The consultation follows a thorough reorganisation of the regulator's structure. A new board took office in January with, for the first time, members with a commercial background and a leaner senior management panel of just five members.
The move, chairman Charles Plant said, would help restore the relationship with large commercial firms, but these firms would also be expected to engage with the SRA.