The Solicitors Regulation Authority (SRA) has marked 25 November 2019 as the official date that the new accounting and regulatory standards for law firms will go live.
The new regulations, which are set to simplify Solicitors Accounts Rules and offer more flexible ways of working, were first announced in February earlier this year.
The regulator said the new standards and regulations will focus on what really matters – the issues “most important to protecting the public and their money”.
However, the new rules will also alleviate the regulatory burden currently imposed on the legal sector. This includes the removal of many “prescriptive rules” which will allow solicitors to operate with greater freedom to use their professional judgment in considering how they meet the new standards.
We have listed the major changes solicitors need to know about below:
- Creating separate codes of conduct for firms and solicitors
- Simpler Account Rules that focus on the principles of keeping client money safe, rather than lots of specific technical rules
- Freeing up solicitors to carry out ‘non-reserved’ legal work from within a business not regulated by a legal services regulator
- Allowing solicitors to provide reserved legal services on a freelance basis
Commenting on the changes, Anna Bradley, Chair of the SRA Board, said: “Our new regulations place a sharp focus on the high professional standards that we and the public expect, while allowing solicitors greater freedom in how they deliver their services.
“By stripping away outdated and unnecessary rules and giving solicitors more flexibility to design and deliver their services around their clients, our new regulations are designed to help people access a wide range of high quality services with the confidence that proper protections are in place. That can only be good for both the public and the profession.”
As accountants for solicitors and law firms, we have taken a particular focus on how the Solicitors Account Rules will affect our clients.
While the basis of the rules remains largely the same, much of the red tape will be removed. For example, the current 52 rules will be condensed into just 13 “principles”.
We expect more details to follow, which will enable us to comprehensively plan how solicitors can adopt and adapt to the new rules.
With Mark Sharpley, executive committee member of the UK200 Legal Group, and fellow partners Jeremy Allison and Nicki Shipley at the helm of an experienced team of legal finance specialists, the Smailes Goldie Group is well positioned to offer tax and accounting advice to solicitors.
Whether you are a sole practitioner or a multi-partner firm, the Smailes Goldie group has the expertise and understanding of all financial matters relating to the legal profession, including: compliance services, Solicitors’ Accounts Rule audits, preparing annual accounts, tax advice for both firms and/or partners, and advising on LLP status.
For more information on any of the issues covered in this bulletin, please contact Mark Sharpley at firstname.lastname@example.org.