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Alternative business structures

22 November 2019

The Legal Services Act 2007 (LSA 2007) allows non-lawyers to own and manage law firms. This practice note provides details on Solicitors Regulation Authority (SRA) regulated alternative business structures (ABSs) and how to apply to become one.

For the purposes of this practice note, solicitor includes registered European lawyers (REL) and registered foreign lawyers (RFL).

Legal status

This practice note is our view of good practice in this area. It’s not legal advice.

Practice notes are issued by the Law Society for the use and benefit of its members. They represent our view of good practice in a particular area. They’re not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them but doing so will make it easier to account to oversight bodies for your actions.

Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they’re accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.

For queries or comments on this practice note contact the Practice Advice Service.

SRA Standards and Regulations

The SRA Standards and Regulations 2019 replaced the SRA Handbook (2011) from 25 November 2019 and any references in this practice note are to the new Regulations.

SRA Principles

There are seven mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Standards and Regulations.

The principles apply to:

  • solicitors or managers of authorised bodies
  • independent solicitors
  • those working in unregulated entities
  • those practising from an office outside the UK
  • lawyer-controlled bodies practising from an office outside the UK

The SRA Overseas Rules and Cross-border Practice Rules (SRA Overseas Code) apply to regulated individuals practicing overseas and to responsible authorised bodies.

Terminology

Must – A specific requirement in legislation or of a principle, rule, regulation or other mandatory provision in the SRA Standards and Regulations. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or the SRA’s Regulatory Arrangements.

Should – Outside of a regulatory context, good practice for most situations in our view. In the case of the SRA Standards and Regulations, a non-mandatory provision (such as may be set out in notes or guidance).

These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer.

May – A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies.

See our full glossary of other terms used

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Practice Advice Service

The Practice Advice Service provides a dedicated support line for Law Society members and employees of law firms. Call us on 020 7320 5675.

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