The SRA’s recent consultation ‘Looking to the future: phase two of our Handbook reforms’ sees the SRA continue towards greater market liberalisation of legal services provision, instigated at the statutory level by the Legal Services Act 2007. The consultation informs the second phase of revising the SRA rules Handbook. The first phase focused on a simpler Code of Conduct and changes to the accounts rules. All reforms are expected to be implemented no earlier than autumn 2018.
Standout proposals in the latest consultation permit solicitors to work “freelance” – a bit like barristers – and the scrapping of the current “3 years rule”, which prevents solicitors setting up business on their own until they have obtained a minimum amount of experience. LawWorks supports aspects of the SRA’s proposals, but shares the concerns of other stakeholders about quality and standards, and the importance of consumer protection. The reforms may potentially bring down the cost of instructing a solicitor, and increase diversity in the profession, as well as making it easier for some solicitors to undertake pro bono work (albeit other restrictions on pro bono will currently remain). In this piece we outline key proposed reforms.
Freelance solicitors
Currently, under the Practice Framework Rules 2011 (PFR), solicitors can only practice in one or more ways listed in Rule 1.1 PFR. The main ways in which solicitors can practice are:
- as Registered Sole Practitioners (RSP);
- as an employee of either an authorised (e.g. a traditional law firm) or a non-SRA authorised organisation (e.g. a firm authorised by a regulatory body other than the SRA); and
- in-house (provided the work done is only for the organisation)
The SRA currently regulates individuals through corporate structures (even Registered Sole Practitioners work through a corporate structure). The SRA’s proposal to permit “freelance” working is in this sense a radical departure: “freelancers” would carry the burden of regulation on their shoulders – selling their wares (as it were) wherever they roam! The intention is to allow solicitors to form self-employed “Chambers” models of practice.
Daringly, the SRA’s marketing describes its reform as the “uberisation” of legal services, language which has triggered quite a backlash from some parts of the profession. The Law Society criticised the reforms as representing a “new Wild West” of legal regulation. The Legal Ombudsman also criticised the proposal, principally around the danger of consumers not knowing who has undertaken work for them and the challenges for enforcement.
The 3 years rule
The SRA’s proposal is to remove the current 3 years rule regarding supervision (Rule 12, Practice Framework Rules (PFR); i.e. the “qualified to supervise” rule), whereby solicitors are, in practice, prevented from setting up on their own until they have acquired a minimum of experience. This prevents, for example, Registered Sole Practitioners (RSPs) setting up business and running cases until they are ‘qualified to supervise’ after 36 months, whether or not they intend to undertake cases which require supervision of other solicitors. The rule acts as a proxy for other practice rules, such as the rules concerning the management of firms and the supervision of junior lawyers which appear elsewhere in the SRA Handbook.
Revolution or evolution?
Compared with RSPs, ‘freelancers’ would be subject to less prior and ongoing regulation, and be free to set up practice wherever they please. Furthermore, with the abolition of the 36 months rule, newly qualified freelancers would, in theory, be able to set up in practice with other newly qualified freelancers, and to run cases and supervise other solicitors from the outset. This is a significant change the current regime and LawWorks shares the concern expressed by the Law Society that inexperienced newly qualified (and unsupervised) freelance solicitors could provide poor quality services to an unsuspecting public. However, the reforms may not inevitably lead to this; indeed their impact may not be as radical as some commentators suggest. Unlike individual newly qualified barristers who are clerked, and join chambers with established reputations and networks of instruction, newly qualified solicitors under the proposed model will need to generate their own work. Unless ‘freelance’ newly qualified solicitors have, by the time of qualification, a client-base, they may need to offer their services to other solicitors who have work, for example by working as supervised juniors on cases led by an experienced solicitors. Offering their services to experienced solicitors is essentially how solicitors starting in the profession have always organised themselves – this model is likely to continue, including for those operating freelance.
Pro bono benefits?
We see some potential benefits that the proposals might bring for encouraging or facilitating pro bono. Currently, for solicitors working in law firms the most compliant way (under Rule 1) to practice pro bono is by volunteering, for example, in clinics “in the course of employment” - in which case their law firm must have agreed. By comparison, freelancers would be permitted to be engaged by law firms (ie under contracts for services), as well as being permitted to volunteer at pro bono clinics outside their contracts with law firms on their own account. For in-house solicitors, Rule 4.10 Practice Framework Rules appears to permit solicitors to volunteer at pro bono clinics by undertaking non-reserved activities on their own account, subject to limited conditions, in which case these reforms might not have a significant impact on pro bono volunteering by in-house solicitors. The situation with undertaking reserved activities pro bono is more complicated for in house solicitors due to restrictions requiring reserved activity undertaken to be related to the employer’s business.
There are other circumstances and pro bono contexts in which the freelance status might offer advantages. There are some clinics in the LawWorks clinics network founded by recently retired solicitors (including former partners) who have become involved in local community groups or organisations, and although they may have significant litigation experience, they find they may be limited in what they can do by way of reserved activities without constituting their clinics as legal practice entities for the purposes of SRA rules.
Conclusion
Given the likely real-world limits to newly qualified solicitors working unsupervised as freelancers, at least in significant numbers, it is unclear why the SRA used an Uber analogy. It is preferable that the SRA maintains an experience threshold, such as the current 3 years rule, at least while any reform on the freelance model has been tested, and to see if the concern of some commentators come to pass. However, on the general principle of “freelancing,” as modern labour and services markets are increasingly characterised by flexible working and different models of self-employment (including using online platforms), it seems unlikely that the legal professions will escape further liberalising measures. In turn, this may impact on pro bono, potentially enabling flexible and innovative approaches, while also needing to ensure skills are used appropriately and maintaining professional standards. We are committed to working constructively with the SRA on regulatory issues and barriers to achieve the best outcome for pro bono practice and the clients of pro bono services. You can download our recent response to the SRA consultation.