Law Firms are one of the most regulated in the UK. This is because it is essential to ensure that lawyers are qualified to provide legal services and that they meet high standards of conduct.
On average there are 600 new start-up law firms authorised each year by the Solicitors Regulation Authority (SRA) in England and Wales. In the year to January 2023, 436 new firms were authorised.
Pre pandemic, this figure was in excess of 750 new authorisations per year. With new ways of working and continued innovation, we expect to see authorisation slowly moving back toward pre pandemic level.
A large percentage of legal start-ups stumble at the first hurdle, whether through their acceptance for insurance or application to the SRA. This could indefinitely delay or prevent authorisation and the commencement of trading.
Schedule a discovery call for us to understand your new business project better. Since each legal business is distinct, this will enable us to devise the most effective strategy.
We will supply you with all the forms that need to be completed. Additionally, we’ll provide you with customised supporting document templates, such as a business and risk management plan, specifically tailored to your new start-up solicitor practice or law firm.
Leveraging our expertise and experience is pivotal to fine-tuning your application and ensuring your success.
It is crucial that you understand your insurance cover, limits and exclusions.
The SRA will not accept a new startup’s application without insurance confirmed in principal. At this stage, we will also advise additional revisions based on the proposed insurance terms.
Once we receive the regulatory approval confirmation we will then help you to complete any subjectivities in order to present this to the insurer to bind cover.
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.
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.
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.
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.
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.
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.
We work with Legal start-ups of all sizes to help them navigate the complex regulatory environment and ensure their compliance.
Book a Discovery Call with us today to discuss your business needs and partner with us for a secure, thriving future.
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