2012 sees the beginning of a new era with the Solicitors Regulation Authority (SRA) accepting applications for Alternative Business Structures (ABS).
The process has taken more than two years of discussions, consultations and preparation to ensure that everything was primed for the SRA to regulate ABS but with the official designation taking place on 23rd December it was felt that 3 January would be better suited as the official start date.
ABS Team Manager, Ann Morgan, says:
"We’ve had to consider all the time that these organisations, as their name suggests, are very different from traditional law firms. And ultimately, they could be as different from each other as they are from regular practices.
One size doesn’t fit all, so we’ll have to assess each application on its merits. And while the preparation work has been very comprehensive, we will need to remain flexible in our approach to deal with these new firms."
John Wotton, Law Society President, has said that “the opening of applications to license alternative business structure (ABS) is important for the entire legal profession, and not only those seeking to adopt this new business model.”
Wotton also added:
“The legal profession in England and Wales is the most respected and competitive in the world because it has matched high standards with an approach which welcomes new entrants and business models. This is in the interests of the strength of the profession as a whole and of England & Wales as the leading jurisdiction in the world.
ABS can provide new opportunities and growth for law firms, but equally those not seeking to adopt ABS have an imperative to be more competitive, accessible and innovative.
While today represents a significant milestone in a changing legal services landscape, our profession has been evolving, developing and becoming more competitive for some time. I expect the profession as a whole will continue that trend as the market becomes more competitive.
The solicitors’ profession established itself as the world’s leader in legal services long before ABS became a reality and is no stranger to competition and change. ABS will prove beneficial for some law firms, but others will continue to thrive, without seeking external investment, for the benefit of their clients and the public. Whatever business model they choose, solicitors will continue to have the full support of the Law Society.”
Drawing on existing expertise the SRA’s ABS team consists of officers who are practised in dealing with supervision, authorisation and identifying risks.
The application process will be started when organisations complete an “online expression of interest” form which is then submitted to the SRA for assessment by the ABS team. The team will then weigh up the information received and a bespoke application pack created for each organisation.
Commenting on the application pack, Ann Morgan adds:
"The bespoke forms are necessarily very detailed and aim to obtain significant amounts of information from the applicants. It stands to reason that this search for information will draw out further questions that we might need to ask.
If we have to engage in further dialogue with firms, they shouldn’t worry or think they’ve done anything wrong. It’s probably going to be standard practice for everyone.
What we do know is that we have to be rigorous and robust – as robust as we are with traditional law firms. For example, we’ll be asking for the employment history of everyone going back five years – we need to have detailed information relating to those who want to be regulated by us."
The fee for applying for ABS will be based on the information needed and will be notified to each organisation once the required information is in place and a further fee, to cover regulating of the licensed body, will be due once the SRA decide to authorise.
A standard fee of £2,000 makes up part of the fee assessment, though a further £150 per candidate will be added to the standard fee.
ABS approval could take up to six months although the SRA are able to grant a three month extension if further checks are required but they are required to notify all applicants in writing if this is the case.
Who will the SRA license first?
Today’s Conveyancer, bringing you the latest conveyancing news and updates.