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Embarking on the journey to establish a new law firm or an alternative business structure (ABS) is an ambitious venture that requires meticulous planning, in-depth understanding of regulatory compliance, and a strategic approach to launch successfully. This comprehensive guide demystifies the complex process and provides a step-by-step roadmap to setting up your legal practice, ensuring you cover all the legal bases for a strong start in the industry.
Starting with the foundational decisions about your firm’s regulatory structure and compliance roles, to writing a robust business plan that ticks the boxes for SRA recognition and PI insurance applications, each step is crucial. Securing solicitors’ professional indemnity insurance is not just a regulatory formality but a cornerstone to gaining SRA approval and establishing trust with future clients.
Beyond the paperwork, preparing for the operationally intensive launch phase involves essential training and risk management. With exclusive resources like training videos and expert insurance advice, Regulated Risks positions you at the forefront of preparedness for your firm’s debut.
As you navigate through the drafting and submission of your SRA application, this guide stands as your indispensable resource, ensuring compliance, fostering preparedness, and outlining the necessary protections your firm needs to thrive from day one. Follow through with this straightforward guide to transform your vision of a law firm or ABS into reality, fortified with the expertise of Regulated Risks to champion your success. For more information regarding new start-up law firms and how Regulated Risks can assist you, click here.
Step 1: Get the law firm / ABS structure right
One of the first things to decide is what regulatory structure best suits your proposed new firm, to agree who is going to hold key compliance roles (such as COLP, COFA and ‘qualified to supervise’) and agree your structure for the SRA authorisation application.
Step 2: Write your business plan
Your business plan is an essential component of your application for recognition to the SRA, a crucial element of your Solicitors PI application (see step 3), and will help you to set clear goals and objectives, define strategies to achieve those objectives and enable you to measure success as you move forward with your new firm.
Step 3: Obtain a solicitors professional indemnity insurance quote
The SRA will not consider a new law firm or alternative business structure (ABS) application unless there is already an offer of professional indemnity insurance that meet’s the SRA’s ‘minimum terms and conditions’ of cover.
The Regulated Risks team can help guide you through this process to ensure that you present your proposed new firm to the insurance market in the best possible light. It is best to take the time to get this right as unsuccessful applications will lead to refusals to offer insurance, which are difficult to reverse and may stay on record.
Step 4: Draft SRA Application
The SRA’s form ‘FA1’ is the main SRA application document whatever you have decided in terms of the structure of your firm. An FA2 is needed for any individuals in the business requiring SRA approval (exemptions may apply such as under 13.2 or 13.3 of the SRA Authorisation Rules).
The SRA no longer require sight of a full office manual for every new solicitor’s firm or alternative business structure application they continue to frequently ask questions about the proposed compliance and training systems which will be in place so it is a good idea to draft a full office manual to support both your application for Solicitors PI Insurance, and your SRA application.
If the firm is a successor practice, is carrying out activities that are subject to money laundering regulations, or is carrying out financial services activity, additional forms and supporting information will be required.
Step 5: Submit SRA application and prepare for launch
It can take a little while to receive authorisation – even if your application has ticked all the required boxes – this is a good time to get ready for launch. Regulated Risks clients get access, via our partnership with For Legal, to a suite of essential training videos (COLP & COFA duties, SRA Code of Conduct, Anti-money Laundering, GDPR, and SRA Accounts Rules) to ensure your knowledge is up to date in all of these areas. For new law firms this can really help the application process as this reassures the SRA that you are ready to practice on your own.
This is also a good time to look at the other areas of risk that are relevant to the firm. The Regulated Risks team can offer advice on the other insurance covers that are required to ensure that your firm is fully protected upon authorisation and launch.
Step 6: SRA Authorisation
Once SRA authorisation is received, before the firm begins to practice, the Solicitors PI cover (and other essential covers) must be put in place. The Regulated Risks team will manage the whole process for you.
Written 15th January 2024
We work with Legal start-ups of all sizes to help them navigate the complex regulatory environment and ensure their compliance.
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