SRA Handbook

SRA Practice Framework Rules 2011

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SRA Practice Framework Rules 2011

Rules dated 17 June 2011 commencing on 6 October 2011

made by the Solicitors Regulation Authority Board, under sections 31, 79 and 80 of the Solicitors Act 1974, sections 9 and 9A of the Administration of Justice Act 1985 and section 83 and Schedule 11 to the Legal Services Act 2007, with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007.

Introduction

Part 1 of these rules sets out the types of business through which solicitors, RELs, RFLs and authorised bodies may practise. It restricts the types of business available in order to reflect statutory provisions and to ensure that clients and the public have the protections provided for by statute.

Part 2 permits authorised bodies, solicitors, RELs and RFLs to carry out certain types of work, including immigration work.

Part 3 governs the formation and practice requirements which must be satisfied by bodies to be eligible for authorisation by the SRA, and is based on the requirements of sections 9 and 9A of the AJA and section 72 of the LSA.

Part 4 sets out certain requirements relating to compliance with these rules and the SRA's regulatory arrangements.

Part 1: Framework of practice

Rule 1: Solicitors

Practice from an office in England and Wales

1.1

You may practise as a solicitor from an office in England and Wales in the following ways only:

(a)

as a recognised sole practitioner or the employee of a recognised sole practitioner;

(b)

as a solicitor exempted under Rule 10.2 from the obligation to be a recognised sole practitioner;

(c)

as a manager, employee, member or interest holder of an authorised body provided that all work you do is:

(i)

of a sort the body is authorised by the SRA to carry out; or

(ii)

done for the body itself, or falls within Rule 4.1 to 4.11, and where this sub-paragraph applies, references in Rule 4 to "employer" shall be construed as referring to that body, accordingly;

(d)

as a manager, employee, member or interest holder of an authorised non-SRA firm, provided that all work you do is:

(i)

of a sort the firm is authorised by the firm's approved regulator to carry out; or

(ii)

done for the firm itself, or falls within Rule 4.1 to 4.11, and where this sub-paragraph applies, references in Rule 4 to "employer" shall be construed as referring to that firm, accordingly;

(e)

as the employee of another person, business or organisation, provided that you undertake work only for your employer, or as permitted by Rule 4 (In-house practice).

Practice from an office outside England and Wales

1.2

You may practise as a solicitor from an office outside England and Wales in the following ways only:

(a)

as a sole practitioner (including a recognised sole practitioner);

(b)

as the employee of a sole principal who is a lawyer;

(c)

as a manager, employee, member or interest holder of an authorised body or of an authorised non-SRA firm, provided that if any of the body's managers or interest holders are non-lawyers and the office is in an Establishment Directive state other than the UK, the rules for local lawyers would permit a local lawyer to practise through a business of that composition and structure;

(d)

as an employee of a business which is not required to be an authorised body, provided that it meets all the following conditions:

(i)

the business carries on the provision of legal advice or assistance, or representation in connection with the application of the law or resolution of legal disputes;

(ii)

a controlling majority of the managers and the interest holders are lawyers practising as such and/or bodies corporate in which lawyers practising as such constitute a controlling majority of the managers and interest holders;

(iii)

if any of the business's managers or interest holders are non-lawyers and any manager or interest holder is subject to the rules for local lawyers, the composition and structure of the business complies with those rules; and

(iv)

if any of the business's managers or interest holders are non-lawyers and the office is in an Establishment Directive state, the rules for local lawyers would permit a local lawyer to practise through a business of that composition and structure;

(e)

as manager, member or interest holder of a business which is not required to be an authorised body, provided that it has no office in England and Wales, and that it meets all the conditions set out in sub-paragraph (d)(i) to (iv) above;

(f)

as the employee of another person, business or organisation, provided that you undertake work only for your employer, or as permitted by Rule 4.22 to 4.25 (In-house practice overseas).

Guidance notes

(i)

See also Rules 10 (Sole practitioners), 13 (Eligibility criteria and fundamental requirements for recognised bodies), 14 (Eligibility criteria and fundamental requirements for licensed bodies), 15 (Formation, registered office and practising address), 16 (Composition of an authorised body) and 17 (Authorised bodies which are companies) below, Chapter 13 of the SRA Code of Conduct (Application and waivers provisions) and the SRA Practising Regulations.

(ii)

See Rule 4.3 below and the definition of "in-house practice" in the Glossary, in relation to in-house work that you carry out for clients which is outside of your firm's authorisation.

(iii)

A recognised body which is a company may not have a corporate director (this also applies to a licensed body). However, when permitted, a corporate body owner and/or manager of a recognised body will need to be a legally qualified body (see the Glossary).

(iv)

The rules do not prevent a solicitor establishing, for example, their own company for tax purposes (which is itself a recognised body) so that that company can be a corporate manager of another firm through which the solicitor practises.

Rule 2: RELs

Practice from an office in England and Wales

2.1

You may practise as an REL from an office in England and Wales in the following ways only:

(a)

as a recognised sole practitioner or the employee of a recognised sole practitioner;

(b)

as an REL exempted under Rule 10.2 from the obligation to be a recognised sole practitioner;

(c)

as a manager, employee, member or interest holder of an authorised body, provided that all work you do is:

(i)

of a sort the body is authorised by the SRA to carry out; or

(ii)

done for the body itself, or falls within Rule 4.1 to 4.11, and where this sub-paragraph applies, references in Rule 4 to "employer" shall be construed as referring to that body, accordingly;

(d)

as a manager, employee, member or interest holder of an authorised non-SRA firm, provided that all work you do is:

(i)

of a sort the firm is authorised by the firm's approved regulator to carry out; or

(ii)

done for the firm itself, or falls within Rule 4.1 to 4.11, and where this sub-paragraph applies, references in Rule 4 to "employer" shall be construed as referring to that firm, accordingly;

(e)

as the employee of another person, business or organisation, provided that you undertake work only for your employer, or as permitted by Rule 4 (In-house practice).

Practice from an office in Scotland or Northern Ireland

2.2

You may practise as an REL from an office in Scotland or Northern Ireland in the following ways only:

(a)

as a sole practitioner (including a recognised sole practitioner);

(b)

as the employee of a sole principal who is a lawyer;

(c)

as a manager, employee, member or interest holder of an authorised body or of an authorised non-SRA firm;

(d)

as an employee of a business which is not required to be an authorised body, provided that it meets all the following conditions:

(i)

the business carries on the provision of legal advice or assistance, or representation in connection with the application of the law or resolution of legal disputes;

(ii)

a controlling majority of the managers and the interest holders are lawyers practising as such and/or bodies corporate in which lawyers practising as such constitute a controlling majority of the managers and interest holders; and

(iii)

if any of the business's managers or interest holders are non-lawyers, the professional rules governing a solicitor of that jurisdiction would allow such a solicitor to practise through a business of that composition and structure;

(e)

as manager, member or interest holder of a business which is not required to be an authorised body, provided that it has no office in England and Wales, and that it meets all the conditions set out in sub-paragraph (d)(i) to (iii) above;

(f)

as the employee of another person, business or organisation, provided that you undertake work only for your employer, or as permitted by Rule 4.22 to 4.25 (In-house practice overseas).

Guidance notes

(i)

The overseas provisions for an REL are the same as those for a solicitor practising overseas except that they apply only in Scotland and Northern Ireland. RELs are not subject to Rule 2 in relation to practice from an office outside the UK.

(ii)

See Rule 4.3 and the definition of "in-house practice" in the Glossary, in relation to in-house work that you carry out for clients which is outside of your firm's authorisation.

(iii)

A recognised body which is a company may not have a corporate director (this also applies to a licensed body). However, when permitted, a corporate body owner and/or manager of a recognised body will need to be a legally qualified body (see the Glossary).

(iv)

The rules do not prevent an REL establishing, for example, their own company for tax purposes (which is itself a recognised body) so that that company can be a corporate manager of another firm through which the REL practises.

Rule 3: RFLs

Practice in the capacity of an RFL 

3.1

Your practice as a foreign lawyer in the capacity of an RFL is confined to practice as:

(a)

the employee of a recognised sole practitioner;

(b)

a manager, employee, member or interest holder of an authorised body, provided that all work you do is:

(i)

of a sort the body is authorised by the SRA to carry out; or

(ii)

done for the body itself, or falls within Rule 4.1 to 4.11, and where this sub-paragraph applies, references in Rule 4 to "employer" shall be construed as referring to that body, accordingly;

(c)

a manager, employee, member or interest holder of an authorised non-SRA firm, provided that all work you do is:

(i)

of a sort the firm is authorised by the firm's approved regulator to carry out; or

(ii)

done for the firm itself, or falls within Rule 4.1 to 4.11, and where this sub-paragraph applies, references in Rule 4 to "employer" shall be construed as referring to that firm, accordingly.

Practice in another capacity than as an RFL 

3.2

If you provide services as a foreign lawyer in any of the following ways in England and Wales or elsewhere, you will not be practising in the capacity of an RFL and you must not be held out or described in that context as an RFL, or as regulated by or registered with the Society or the SRA:

(a)

as a sole principal; or

(b)

as a manager, member or interest holder of any business or organisation other than an authorised body or an authorised non-SRA firm; or

(c)

as a manager, member or interest holder of a body corporate which is a manager, member or interest holder of any business or organisation other than an authorised body or an authorised non-SRA firm; or

(d)

as the employee of any business or organisation other than a recognised sole practitioner, an authorised body or an authorised non-SRA firm.

3.3

If you have a practice under Rule 3.1 above, and another business under Rule 3.2 above, the latter is a separate business for the purpose of these rules and you must therefore comply with Chapter 12 (Separate businesses) of the SRA Code of Conduct.

Scope of practice

3.4

Whether or not you are practising in the capacity of an RFL you must not:

(a)

be held out in any way which suggests that you are, or are entitled to practise as, a lawyer of England and Wales;

(b)

undertake the following reserved work in England and Wales:

(i)

advocacy in open court;

(ii)

the conduct of court litigation;

(iii)

the administration of oaths and statutory declarations;

(c)

undertake advocacy in chambers in England and Wales, except under instructions given by a person qualified to supervise that reserved work;

(d)

undertake the following reserved work in England and Wales, except at the direction and under the supervision of a person qualified to supervise that reserved work:

(i)

the preparation of court documents;

(ii)

the preparation of instruments and the lodging of documents relating to the transfer or charge of land;

(iii)

the preparation of papers on which to found or oppose a grant of probate or a grant of letters of administration;

(iv)

the preparation of trust deeds disposing of capital, unless you also are eligible to act as a lawyer of England and Wales;

(e)

If you are not practising in the capacity of an RFL you must not carry out immigration work in the UK unless you are entitled to do so by virtue of being a qualified person within the meaning of section 84 of the Immigration and Asylum Act 1999, whether this is as a result of being entitled to do the work in your own right, doing so under supervision, or otherwise.

Guidance notes

(i)

A foreign lawyer must be registered with the SRA as an RFL to be a manager, member or interest holder of a recognised body, with the following exceptions:

(a)

a foreign lawyer who is also qualified as a lawyer of England and Wales does not have to be an RFL;

(b)

a member of an Establishment Directive profession - except that if the lawyer is not a national of an Establishment Directive state and will be based, or partly based, in England and Wales, he or she does have to be an RFL in order to be a manager, member or interest holder of a recognised body. See our website for additional guidance on RFLs and multi-national practice.

(ii)

There is no requirement to register as an RFL in order to be employed by a recognised body or sole practitioner or to be a manager or interest holder of, or employed by, a licensed body but, if you are registered as an RFL, you will be subject to SRA regulation in this capacity when working for an SRA firm or an authorised non-SRA firm.

(iii)

An RFL is subject to the same restrictions as a solicitor or REL in relation to practice from an office in England and Wales with two exceptions. Your registration as an RFL does not entitle you to practise:

(a)

as an RFL sole practitioner; or

(b)

as an in-house RFL (subject to note (iv) below).

(iv)

Registration as an RFL is portable to the extent that it will enable you to be a manager, employee, member or interest holder of an authorised non-SRA firm, although your ability to work within such a firm will depend on the framework of practice requirements of the relevant approved regulator. You will be able to undertake work authorised by the firm's approved regulator (subject to any statutory limitations or requirements). Additionally you will be able to function as an in-house lawyer under Rule 4, doing other work for the employer, related bodies, work colleagues and pro bono clients under the SRA's rules.

(v)

Your registration as an RFL will not be relevant in the role of interest holder or employee of a business in England and Wales which is not regulated by the SRA or one of the other approved regulators. The SRA does not regulate any practice you might have outside the framework established under the LSA, so there must be no implication in such a context that you are an RFL, or that you or the business are regulated by or registered with the SRA or the Society.

(vi)

Where, in order to satisfy statutory requirements, there is a need for an RFL doing reserved work to be supervised or directed by someone in the firm, this can only be undertaken by a person of equivalent or higher status.

(vii)

See the application provisions in 4.2 of the SRA Principles. Also see the provisions relating to practice from an office outside England and Wales in Chapter 13 of the SRA Code of Conduct.

(viii)

See Rule 4.3 and the definition of "in-house practice" in the Glossary, in relation to in-house work that you carry out for clients which is outside of your firm's authorisation.

(ix)

A recognised body which is a company may not have a corporate director (this also applies to a licensed body). However, when permitted, a corporate body owner and/or manager of a recognised body will need to be a legally qualified body (see the Glossary).

Rule 4: In-house practice

4.1

If you are a solicitor, REL or RFL conducting in-house practice:

(a)

you must not act for clients other than your employer except in the circumstances in 4.4 to 4.26 (all of which are subject to 4.1(b) and 4.2) and where you are able to act without compromising the Principles or your obligations under the SRA Code of Conduct;

(b)

nothing in this rule permits any person to conduct reserved legal activities in circumstances where to do so would require authorisation under the LSA and you must satisfy yourself that any such authorisation is in place before conducting any such activity.

4.2

Indemnity

(a)

In order to act for a client other than your employer under Rule 4.10, 4.14, 4.16 and 4.19, you must have professional indemnity insurance cover.

(b)

In all other cases you must consider whether your employer has appropriate indemnity insurance or funds to meet any award made as a result of a claim in professional negligence against you, for which your employer might be vicariously liable. If not, you must inform the client in writing that you are not covered by the compulsory insurance scheme.

4.3

If you are a solicitor, REL or RFL in a licensed body or an authorised non-SRA firm, you must comply with this rule as if you were an in-house solicitor or REL when, as a manager or employee, you do work of a type which is outside the scope of the firm's authorisation in accordance with Rules 1, 2 or 3, either for the firm itself or within 4.4 to 4.6 (Work colleagues), 4.7 to 4.9 (Related bodies) or 4.10 to 4.11 (Pro bono work).

Work colleagues

4.4

Subject to Rule 4.5 below, you may act for a person who is, or was formerly:

(a)

an employee, a manager, the company secretary, a board member or a trustee of your employer;

(b)

an employee, a manager, the company secretary, a board member or a trustee of a related body of your employer; or

(c)

a contributor to a programme or periodical publication, broadcast or published by your employer or by a related body, but only where the contributor is a defendant or potential defendant in a defamation case.

4.5

You may act under Rule 4.4 above only if:

(a)

the matter relates to and arises out of the work of the employee, manager, company secretary, board member, trustee or contributor in that capacity;

(b)

the matter does not relate to a claim arising as a result of a personal injury to the employee, manager, company secretary, board member, trustee or contributor;

(c)

you are satisfied that the employee, manager, company secretary, board member, trustee or contributor does not wish to instruct some other lawyer; and

(d)

no charge is made for your work unless those costs are recoverable from another source.

4.6

Where acting in a conveyancing transaction under Rule 4.4(a) or (b) above you may also act for a joint owner or joint buyer of the property and for a mortgagee.

Related bodies

4.7

You may act for:

(a)

your employer's holding, associated or subsidiary company;

(b)

a partnership, syndicate, LLP or company by way of joint venture in which your employer and others have an interest;

(c)

a trade association of which your employer is a member; or

(d)

a club, association, pension fund or other scheme operated for the benefit of employees of your employer.

4.8

If you are employed in local government, Rule 4.7(a) and (b) above do not apply.

4.9

For the purpose of Rule 4.10 to 4.14 references to your employer include related bodies of the employer, and "employment" and "employed" must be construed accordingly.

Pro bono work

4.10

You may, in the course of your practice, conduct work on a pro bono basis for a client other than your employer provided:

(a)

the work is covered by an indemnity reasonably equivalent to that required under the SRA Indemnity Insurance Rules;

(b)

either:

(i)

no fees are charged; or

(ii)

a conditional fee agreement is used and the only fees charged are those which you receive by way of costs from your client's opponent or other third party and all of which you pay to a charity under a fee sharing agreement; and

(c)

you do not undertake any reserved legal activities, unless the provision of relevant services to the public or a section of the public (with or without a view to profit) is not part of your employer's business.

4.11

Rule 4.10 above does not permit you to conduct work on a pro bono basis in conjunction with services provided by your employer under Rule 4.12 (Associations), Rule 4.13 (Insurers), Rule 4.14 (Commercial legal advice services) or Rule 4.19 to 4.21 (Foreign law firms).

Associations

4.12

If you are employed by an association you may act for a member of that association provided:

(a)

the membership of the association is limited to persons engaged or concerned in a particular trade, occupation or specialist activity or otherwise having a community of interest, such interest being a specialist interest;

(b)

the association is one formed bona fide for the benefit of its members and not formed directly or indirectly for your benefit or primarily for securing assistance in legal proceedings;

(c)

there is no charge to the member in non-contentious matters, and in contentious matters the association indemnifies the member in relation to your costs and disbursements insofar as they are not recoverable from any other source; and

(d)

you act only in matters that relate to or arise out of the particular trade, occupation or specialist activity of the association or otherwise relate to the specialist community of interest, for which the association is formed.

Insurers

4.13

If you are employed by an insurer subrogated to the rights of an insured in respect of any matter you may act on behalf of the insurer in relation to that matter in the name of the insured, and also:

(a)

act on behalf of the insured in relation to uninsured losses in respect of the matter;

(b)

act in proceedings both for the insured and for a defendant covered by another insurer where the insurers have agreed an apportionment of liability; and/or

(c)

act in the matter on behalf of the employer and another insurer in the joint prosecution of a claim.

Commercial legal advice services

4.14

If you are employed by a commercial organisation providing a telephone legal advice service you may advise persons making enquiries of that organisation, provided:

(a)

the advice comprises telephone advice only, together with a follow up letter to the enquirer when necessary;

(b)

you are satisfied that there is indemnity cover reasonably equivalent to that required under the SRA Indemnity Insurance Rules; and

(c)

you do not undertake any reserved legal activities.

Local government

4.15

If you are employed in local government you may act:

(a)

for another organisation or person to which or to whom the employer is statutorily empowered to provide legal services, subject to the conditions in (b) to (g) below;

(b)

for a member or former member of the local authority, provided that:

(i)

the matter relates to or arises out of the work of the member in that capacity;

(ii)

the matter does not relate to a claim arising as a result of a personal injury to the member;

(iii)

you are satisfied that the member does not wish to instruct some other lawyer; and

(iv)

no charge is made for your work unless those costs are recoverable from some other source;

(c)

for a company limited by shares or guarantee of which:

(i)

the employer or nominee of the employer is a shareholder or guarantor; or

(ii)

you are, or an officer of the employer is, appointed by the employer as an officer of the company,

provided the employer is acting in pursuance of its statutory powers;

(d)

for lenders in connection with new mortgages arising from the redemption of mortgages to the local authority, provided:

(i)

neither you nor any other employee acts on behalf of the borrowers; and

(ii)

the borrowers are given the opportunity to be independently advised by a qualified conveyancer of their choice;

(e)

for a charity or voluntary organisation whose objects relate wholly or partly to the employer's area, provided that there is no charge to the charity or voluntary organisation in non-contentious matters, and in contentious matters the employer indemnifies the charity or voluntary organisation in relation to your costs insofar as they are not recoverable from any other source;

(f)

for a patient who is the subject of a Court of Protection Order where you are acting for a work colleague (under Rule 4.4 to 4.6 above) who is appointed as deputy for the patient; or

(g)

for a child or young person subject to a Care Order in favour of the employer on an application to the Criminal Injuries Compensation Authority.

Law Centres, charities and other non-commercial advice services

4.16

If you are employed by a law centre or advice service operated by a charitable or similar non-commercial organisation you may give advice to and otherwise act for members of the public, provided:

(a)

no funding agent has majority representation on the body responsible for the management of the service, and that body remains independent of central and local government;

(b)

no fees are charged save:

(i)

where the client is publicly funded; or

(ii)

where the organisation indemnifies the client in relation to your costs insofar as they are not recoverable from any other source;

(c)

all fees you earn and costs you recover are paid to the organisation for furthering the provision of the organisation's services;

(d)

the organisation is not described as a law centre unless it is a member of the Law Centres Federation; and

(e)

the organisation has indemnity cover in relation to the legal activities carried out by you, reasonably equivalent to that required under the SRA Indemnity Insurance Rules.

4.17

Rule 4.16 above does not apply to an association formed for the benefit of its members.

The Crown, non-departmental public bodies and the Legal Services Commission

4.18

If you are employed by the Crown, a non-departmental public body or the Legal Services Commission (or any body established or maintained by the Legal Services Commission), you may give legal advice to, and act for, persons other than your employer if in doing so you are carrying out the lawful functions of your employer.

Foreign law firms

4.19

You may provide legal services to your employer's clients, subject to the conditions set out in Rule 4.20 below, if you are a solicitor or an REL employed by:

(a)

a practising lawyer of another jurisdiction who:

(i)

is not struck off or suspended from the register of foreign lawyers or the register of European lawyers; and

(ii)

is not practising in that context as a solicitor or as an REL; or

(b)

a business whose managers and interest holders are all practising through that business as lawyers of jurisdictions other than England and Wales, and do not include any person who:

(i)

is struck off or suspended from the register of foreign lawyers or the register of European lawyers; or

(ii)

is practising through or in the context of that business as a solicitor or as an REL.

4.20

You must meet the following conditions if acting, under Rule 4.19 above, for anyone other than your employer.

(a)

Even if you are qualified to do such work for your employer, you must not do, or supervise or assume responsibility for doing any of the following:

(i)

drawing or preparing any instrument or papers comprising reserved legal activities under section 12(1)(c) or (d) of the LSA;

(ii)

exercising any right of audience, or right to conduct litigation (including making any application or lodging any document relating to litigation), before a court or immigration tribunal; or

(iii)

providing any immigration advice or immigration services, unless the employer, or a senior fellow employee, is registered with the Immigration Services Commissioner.

(b)

You must ensure that the work you do is covered by professional indemnity insurance reasonably equivalent to that required under the SRA Indemnity Insurance Rules.

(c)

You must:

(i)

inform your client that your employer is not regulated by the SRA and that the SRA's compulsory insurance scheme does not apply, and either give or confirm this information in writing, if you are a solicitor, and you are held out to a client as a solicitor (or as an English or Welsh lawyer) in connection with work you are doing for that client; and

(ii)

ensure that if you are identified on the notepaper as a solicitor (or as an English or Welsh lawyer) the notepaper also states that your employer is not regulated by the SRA.

4.21

Rule 4.20(c) above should also be read as referring to an REL being held out or identified as a lawyer, or under the REL's title from their home state.

In-house practice overseas

4.22

Rules 4.10 and 4.11 (Pro bono work) apply to your overseas practice.

4.23

The other provisions of Rule 4 (In-house practice) do not apply to your overseas practice, but you must comply with Rules 4.24 and 4.25 below.

4.24

Subject to 4.25 below, you may act as an in-house lawyer, but only for:

(a)

your employer;

(b)

a company or organisation controlled by your employer or in which your employer has a substantial measure of control;

(c)

a company in the same group as your employer;

(d)

a company which controls your employer; or

(e)

an employee (including a director or a company secretary) of a company or organisation under (a) to (d) above, provided that the matter relates to or arises out of the work of that company or organisation, does not relate to a claim arising as a result of a personal injury to the employee, and no charge is made for your work unless those costs are recoverable from another source.

4.25

If you are a solicitor registered in another state under the Establishment Directive with the professional body for a local legal profession you may practise in-house to the extent that a member of that legal profession is permitted to do so.

Regulatory bodies

4.26

If you are employed by a regulatory body you may in carrying out the function of the employer give legal advice to other persons and, where those functions are statutory, may act generally for such persons.

Guidance notes

(i)

This rule applies to you if you are a solicitor or REL (or in limited circumstances an RFL) working in in-house practice, which is generally when you are working otherwise than through a regulated legal practice such as an authorised body or an authorised non-SRA firm. However, these provisions also apply to you if you are a solicitor, REL or RFL when working in a licensed body or an authorised non-SRA firm but are doing work, for example, for the firm itself which is outside the scope of the firm's own authorisation.

(ii)

The general principle, subject to limited exceptions, is that your employer itself will need to be authorised if, in your capacity as an employee and as part of your employer's business, you wish to provide reserved legal services to the public (see LSA, section 15(4)). The provisions of 4.4 to 4.26, regarding acting in an in-house capacity for clients other than your employer, are subject to the provisions of the LSA which may nonetheless require your employer to obtain authorisation, for example members of an association may be "the public or a section of the public" for the purposes of the LSA. Such issues should be kept under review as your position may change e.g. your employer's business may develop in such a way that it requires authorisation.

(iii)

If you are a solicitor working in-house (whether in or outside England and Wales) you must comply with Rule 9 (Practising certificates). For further guidance on the need for a practising certificate see our website. Examples of situations where you will be practising as a solicitor, and will therefore need a practising certificate, include:

(a)

you are employed as a solicitor;

(b)

you are held out, on stationery or otherwise, as a solicitor for your employer;

(c)

you administer oaths;

(d)

you appear before a court or tribunal in reliance upon your qualification as a solicitor;

(e)

you instruct counsel;

(f)

you undertake work which is prohibited to unqualified persons under the provisions of Part 3 of the LSA, unless you are supervised by, and acting in the name of, a solicitor with a practising certificate or another qualified person;

(g)

your only qualification as a lawyer is that you are a solicitor, and:

(A)

you are employed or held out as a lawyer;

(B)

you undertake work in another jurisdiction which is reserved to lawyers;

(C)

you are registered in a state other than the UK under the Establishment Directive; or

(D)

you are a registered foreign legal consultant in another jurisdiction.

(iv)

In England and Wales a number of statutory exceptions apply to qualify (ii). Certain in-house government solicitors are allowed to practise as solicitors without practising certificates. Some reserved work can be undertaken by non-solicitors working for local government, and therefore by non-practising solicitors working for local government. See also Rules 9, 10 and 11.

(v)

A solicitor acting only as a justices' clerk in England and Wales is not practising as a solicitor and can instruct counsel without a practising certificate.

(vi)

If you are an in-house solicitor the address of your employer's legal department is the place (or one of the places) where you practise and must therefore be notified to the SRA.

(vii)

If you handle client money, the SRA Accounts Rules will apply to you unless you are exempted under Rule 5 of those rules.

(viii)

If you are working in-house as the senior legal adviser of a company or a local authority you should have direct access to the board or to the council and its committees, and should try to ensure that your terms of employment provide for such access. "Direct access" does not mean that all instructions and advice must pass directly to and from the council, committee or board, but you must have direct access where necessary.

(ix)

An in-house solicitor may act for work colleagues, subject to certain safeguards, provided the matter relates to and arises out of the person's work for the employer. This will cover matters that relate directly to the fellow employee's work but would not, for example, permit reserved legal services to be offered as a benefit under an employment package. Those working in-house will need to consider whether they are allowed to act on a case by case basis and, in particular, the extent to which there is a direct relationship between the work colleague's employment and the reserved legal activity.

(x)

The ability of in-house solicitors to act for clients on a pro bono basis is limited by the LSA, which requires that, in general, the provision of reserved legal services to the public is carried out through an authorised body. There is no such limitation under the LSA in respect of unreserved services, such as providing legal advice. Rule 4.10 sets out the parameters within which in-house solicitors may provide reserved services on a pro bono basis, reflecting the position under the LSA. To determine whether you can undertake reserved legal activities within 4.10, one question will be whether the activities to be undertaken can be regarded as part of the business of the employer. Relevant factors are likely to be:

(a)

relevancy of such work to the employer's business;

(b)

whether the work is required of the employee by the employer;

(c)

how often such work is carried out;

(d)

where such work is carried out;

(e)

when such work is carried out;

(f)

whether such work is explicitly carried out on the employer's behalf;

(g)

who provides the necessary professional indemnity insurance;

(h)

the extent to which the employer relies on or publicises such work;

(i)

whether the employer provides management, training or supervision in relation to such work;

(j)

whether the employer specifically rewards the employee in any way in relation to such work;

(k)

how many employees carry out the work, and the overall proportion of their time spent on such work;

(l)

the extent to which such work complements or enhances the employer's business.

All the circumstances, and the context, will be critical to your decision about whether you may act, for example the work will not necessarily be part of the employer's business merely because it is carried out in office hours, or at the employer's premises.

There will be some situations which are likely to be easier to judge. If there is a clear relationship with the employer's business, acting will not be permissible. For example, you are likely to be prevented from acting:

(A)

where the employer describes its business as including the provision of pro bono services;

(B)

where the work may boost the employer's business by providing extra business opportunities or creating contacts.

(xi)

If you are employed as a solicitor or REL by an insurer which runs a commercial legal telephone advice service, the restrictions in Rule 4.14 will not apply to prevent you acting for an insured in accordance with Rule 4.13.

(xii)

If you are employed as a solicitor or REL by a law centre or advice service operated by a charitable or similar non-commercial organisation, you can advise and act for members of the public provided you comply with Rule 4.16 and 4.17. A solicitor or REL who works as a volunteer for such an advice service must comply with the SRA Indemnity Insurance Rules unless exempted by a waiver. If your employer obtains authorisation as a licensed body you will not need to rely on the exceptions in Rule 4.

(xiii)

As the in-house employee of a foreign law firm under Rule 4.19 and 4.20 you may not do reserved work for clients or (unless your employer is separately authorised) immigration work. You must also comply with special requirements as to insurance and "health warnings". Note also, that if you are employed by a foreign law firm and a principal, interest holder or director of the firm is a solicitor, Rule 4.19 and 4.20 will not apply unless the solicitor is dually qualified and is practising only as a lawyer of another jurisdiction in the context of that business.

(xiv)

By contrast, employment overseas by a foreign law firm will not usually fall within the definition of in-house practice in Chapter 14 of the Glossary if your employer is a lawyer or a law firm.

(xv)

If you are a solicitor, REL or RFL practising as a manager, employee, member or interest holder of an authorised non-SRA firm, neither Rule 4, nor the bulk of the SRA Code of Conduct, nor the SRA Accounts Rules, will be relevant to you when you do work of a type that is within the scope of the firm's authorisation. See Chapter 13 of the SRA Code of Conduct (Application and waivers provisions).

(xvi)

If you are a solicitor, REL or RFL practising as a manager, employee, member or interest holder of an authorised non-SRA firm, you must comply with Rule 4, with the SRA Code of Conduct, and with the SRA Accounts Rules, as if you were an in-house solicitor or REL when you do work of a type which is outside the scope of the firm's authorisation - see Rule 4.3 and the definition of "in-house practice" in the Glossary.

(xvii)

Note that if you are a solicitor, REL or RFL and you are a manager, member or interest holder of an authorised non-SRA firm, or employed in such a firm in connection with the provision of any legal services, it must be:

(a)

in your capacity as a solicitor, REL or RFL, or

(b)

in the capacity of an individual authorised by an approved regulator other than the SRA, if you are so authorised, or

(c)

in both such capacities;

except that if you are a solicitor who is a director of an authorised non-SRA firm or employed in such a firm in connection with the provision of any legal services, you must be practising in your capacity as a solicitor, even if also in some other capacity. See Rule 11.2 and 11.3, as well as section 1A(d) of the SA.

Rule 5: Authorised bodies

Practice from an office in England and Wales

5.1

An authorised body may practise from an office in England and Wales in the following ways only:

(a)

as a stand-alone firm;

(b)

as a manager, member or interest holder of another authorised body;

(c)

as a manager, member or interest holder of an authorised non-SRA firm, in which case you must comply with any terms and requirements imposed on that firm's authorisation; or

(d)

as an executor, trustee or nominee company, or a company providing company secretarial services, wholly owned and operated by another authorised body or by a recognised sole practitioner.

Practice from an office outside England and Wales

5.2

An authorised body may practise from an office outside England and Wales in the following ways only:

(a)

as a stand-alone firm, provided that if any of the body's managers or interest holders are non-lawyers and the office is in an Establishment Directive state other than the UK, the rules for local lawyers would permit a local lawyer to practise through a business of that composition and structure;

(b)

as a manager, member or interest holder of a business which has no office in England and Wales and meets all the following conditions:

(i)

the business carries on the provision of legal advice or assistance, or representation in connection with the application of the law or resolution of legal disputes;

(ii)

a controlling majority of the managers and the interest holders are lawyers practising as such and/or bodies corporate in which lawyers practising as such constitute a controlling majority of the managers and interest holders;

(iii)

if any of the business's managers or interest holders are non-lawyers and any manager or interest holder is subject to the rules for local lawyers, the composition and structure of the business complies with those rules; and

(iv)

if any of the business's managers or interest holders are non-lawyers and the office is in an Establishment Directive state other than the UK, the rules for local lawyers would permit a local lawyer to practise through a business of that composition and structure;

(c)

as an executor, trustee or nominee company, or a company providing company secretarial services, wholly owned and operated by another authorised body or by a recognised sole practitioner.

Guidance notes

(i)

See Part 3 of these rules for the formation and eligibility criteria for recognised bodies and licensed bodies.

(ii)

Authorised bodies can have a complex structure, involving multi-layered ownership. But note that a partnership cannot be a partner in another partnership which is an authorised body because a partnership does not have separate legal identity (although, as an exception, an overseas partnership with separate legal identity could be a partner in a partnership which is an authorised body).

(iii)

The rules do not prevent an authorised body being a manager, member or interest holder of a recognised body or an authorised non-SRA firm which has an office outside England and Wales.

Rule 6: Managers and employees authorised by another approved regulator

6.1

If you are a manager or employee of an authorised body or an employee of a recognised sole practitioner and you are not a solicitor but you are authorised by an approved regulator other than the SRA, you must not:

(a)

be held out in any way which suggests that you are, or are entitled to practise as, a solicitor;

(b)

undertake the following reserved work in England and Wales, unless authorised by your approved regulator to do so:

(i)

advocacy in open court;

(ii)

the conduct of court litigation;

(iii)

the administration of oaths and statutory declarations;

(c)

undertake advocacy in chambers in England and Wales, unless authorised by your approved regulator or acting under instructions given by a person qualified to supervise that reserved work;

(d)

undertake the following reserved work in England and Wales, unless authorised by your approved regulator or acting under the supervision of a person qualified to supervise that reserved work:

(i)

the preparation of court documents;

(ii)

the preparation of instruments and the lodging of documents relating to the transfer or charge of land;

(iii)

the preparation of papers on which to found or oppose a grant of probate or a grant of letters of administration;

(iv)

the preparation of trust deeds disposing of capital;

(e)

undertake the conduct of immigration tribunal proceedings in the UK or advocacy before an immigration tribunal in the UK unless you are authorised by your approved regulator or the Immigration Services Commissioner to do that work;

(f)

prepare documents in the UK for immigration tribunal proceedings unless you are authorised by your approved regulator or the Immigration Services Commissioner to do that work or acting under the supervision of a person qualified to supervise that reserved work; or

(g)

carry out immigration work in the UK which is not within (b) to (f) above, unless you are authorised by your approved regulator or the Immigration Services Commissioner to do that work, or acting under the supervision of an individual working in the firm who is authorised under statute to do that work.

Guidance notes

(i)

Rule 16 permits lawyers and firms authorised by another approved regulator to be interest holders and managers of an authorised body.

(ii)

An individual authorised by another approved regulator cannot practise as a sole practitioner regulated by the SRA as the SRA can only authorise and regulate sole solicitors and RELs.

(iii)

Where, in order to satisfy statutory requirements, there is a need for an individual doing reserved work to be supervised or directed by someone in the firm, this can only be undertaken by a person of equivalent or higher status.

(iv)

A lawyer of England and Wales who is an individual authorised by another approved regulator is subject to the SRA's regulatory arrangements in relation to practice outside England and Wales if he or she is a manager of an authorised body.

Rule 7: Managers and employees who are not lawyers

7.1

If you are a manager or employee of an authorised body or an employee of a recognised sole practitioner and you are not a lawyer of England and Wales, an RFL or a lawyer of an Establishment Directive profession, you must not:

(a)

be held out in any way which suggests that you are, or are entitled to practise as, a lawyer of England and Wales;

(b)

undertake the following reserved work in England and Wales:

(i)

advocacy in open court;

(ii)

the conduct of court litigation;

(iii)

the administration of oaths and statutory declarations;

(c)

undertake advocacy in chambers in England and Wales, except under instructions given by a person qualified to supervise that reserved work;

(d)

undertake the following reserved work in England and Wales, except at the direction and under the supervision of a person qualified to supervise that reserved work:

(i)

the preparation of court documents;

(ii)

the preparation of instruments and the lodging of documents relating to the transfer or charge of land;

(iii)

the preparation of papers on which to found or oppose a grant of probate or a grant of letters of administration;

(iv)

the preparation of trust deeds disposing of capital;

(e)

undertake the conduct of immigration tribunal proceedings in the UK or advocacy before an immigration tribunal in the UK unless you are authorised by the Immigration Services Commissioner to do that work;

(f)

prepare documents in the UK for immigration tribunal proceedings unless you are authorised by the Immigration Services Commissioner to do that work, or acting under the supervision of a person qualified to supervise that reserved work; or

(g)

carry out immigration work in the UK which is not within (b) to (f) above, unless you are authorised by the Immigration Services Commissioner to do that work or you do the work under the supervision of an individual working in the firm who is authorised under statute to do that work.

Guidance note

(i)

A non-lawyer manager is subject to the SRA's regulatory arrangements in relation to legal practice outside England and Wales if he or she is a manager of an authorised body.

Part 2: Rights of practice

Rule 8: Reserved work and immigration work

Solicitors

8.1

As a solicitor, provided that you comply with Rule 9.1, you are authorised by the SRA:

(a)

to undertake the following reserved work:

(i)

the exercise of any right of audience which solicitors had immediately before 7 December 1989;

(ii)

the exercise of any additional right of audience if you have a relevant higher courts advocacy qualification awarded by the SRA or another approved regulator;

(iii)

the conduct of, and the preparation of documents in, court and immigration tribunal proceedings;

(iv)

the preparation of instruments and the lodging of documents relating to the transfer or charge of land;

(v)

the preparation of trust deeds disposing of capital;

(vi)

the preparation of papers on which to found or oppose a grant of probate or a grant of letters of administration;

(vii)

the administration of oaths and statutory declarations; and

(b)

to undertake immigration work not included under (a) above.

RELs

8.2

As an REL, you are authorised by the SRA:

(a)

to undertake the following reserved work:

(i)

the exercise of any right of audience which solicitors had immediately before 7 December 1989;

(ii)

the exercise of any additional right of audience provided that you have a relevant higher courts advocacy qualification awarded by the SRA or another approved regulator;

(iii)

the conduct of, and the preparation of documents in, court and immigration tribunal proceedings;

(iv)

the preparation of instruments and the lodging of documents relating to the transfer or charge of land, provided you are a member of a profession listed under regulation 12 of the European Communities (Lawyer's Practice) Regulations 2000;

(v)

the preparation of trust deeds disposing of capital;

(vi)

the preparation of papers on which to found or oppose a grant of probate or a grant of letters of administration, provided you are a member of a profession listed under regulation 13 of the European Communities (Lawyer's Practice) Regulations 2000;

(vii)

the administration of oaths and statutory declarations; and

(b)

to undertake immigration work not included under (a) above.

8.3

When as an REL you exercise a right of audience before a court under 8.2(a)(i) or (ii), conduct court litigation under 8.2(a)(iii) or prepare court documents under 8.2(a)(iii) you must act in conjunction with a solicitor or barrister authorised to do that work.

RFLs

8.4

As an RFL working within Rule 3 you are authorised by the SRA:

(a)

to undertake the following reserved work:

(i)

advocacy before immigration tribunals; and

(ii)

the conduct of, and the preparation of documents in, immigration tribunal proceedings; and

(b)

to undertake immigration services which are not reserved work and are not included under (a) above, and to provide immigration advice.

Recognised bodies

8.5

Recognised bodies

(a)

A recognised body is authorised by the SRA to undertake the following reserved work:

(i)

advocacy before a court or immigration tribunal provided the manager or employee exercising the right of audience is authorised by the SRA, or otherwise entitled, to do so;

(ii)

the conduct of proceedings in a court or immigration tribunal;

(iii)

the preparation of documents in proceedings before a court or immigration tribunal;

(iv)

the preparation of instruments and the lodging of documents relating to the transfer or charge of land, provided the body has a manager who is:

(A)

an individual who is authorised to do that work, or

(B)

a body corporate which has a manager who is authorised to do that work;

(v)

the preparation of trust deeds disposing of capital;

(vi)

the preparation of papers on which to found or oppose a grant of probate or a grant of letters of administration, provided the body has a manager who is an individual authorised to do that work, or a body corporate with a manager who is authorised to do that work; and

(vii)

the administration of oaths and statutory declarations.

(b)

A recognised body is authorised to undertake immigration services which are not within (a) above, and to provide immigration advice.

Licensed bodies

8.6

A licensed body is authorised by the SRA to undertake the reserved legal activities and immigration work specified in the authorisation granted to the body under Rule 6 of the SRA Authorisation Rules.

Sole practitioner firms

8.7

Sole practitioner firms

(a)

A recognised sole practitioner who is a solicitor is authorised by the SRA:

(i)

to provide any reserved work which the solicitor is authorised to provide under Rule 8.1 above, and any other advocacy service through an employee of the sole practitioner's firm exercising a right of audience as authorised by the SRA, or otherwise entitled, to do; and

(ii)

to undertake immigration services which are not within (i) above, and provide immigration advice.

(b)

A recognised sole practitioner who is an REL is authorised by the SRA:

(i)

to provide any reserved work which the REL is authorised to provide under Rule 8.2 above, and any other advocacy service through an employee of the sole practitioner's firm exercising a right of audience as authorised by the SRA, or otherwise entitled, to do; and

(ii)

to undertake immigration work which is not within (i) above.

Guidance notes

(i)

Reserved work is work that is defined in Schedule 2 to the LSA as a "reserved legal activity". Certain categories of reserved work (rights of audience in chambers, reserved instrument activities and probate activities) can be done by an unqualified person under the supervision of a manager or fellow employee qualified to do that work - see Schedule 3 to the LSA.

(ii)

Immigration work (immigration advice and immigration services) is restricted to certain persons under the Immigration and Asylum Act 1999. Immigration services relating to courts or immigration tribunals are reserved work - advocacy, the conduct of cases, and the preparation of papers. The court work is subject to the normal restriction on court work. Immigration Tribunal work can be done by RFLs who are practising as such. Other immigration work is not reserved work, but can only be done by an authorised person such as a solicitor, a barrister, a legal executive, a member of an Establishment Directive profession, or an RFL practising as such, or under the supervision of an authorised person, or under an exemption given by the Office of the Immigration Services Commissioner.

(iii)

The Financial Services and Markets Act 2000 reserves the provision of "regulated activities" to persons authorised by the Financial Services Authority (FSA). Certain "regulated activities", ancillary to the provision of a professional service, are exempt from regulation by the FSA when carried out by firms authorised by the SRA - see the SRA Financial Services (Scope) Rules. For the definition of "regulated activity" see the activities specified in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544).

(iv)

From 31 March 2012 or the date on which an order made pursuant to section 69 of the LSA relating to the status of sole practitioners comes into force, whichever is the later, a sole practitioner's firm will be regulated as a type of authorised body and will be authorised under the SRA Authorisation Rules.

(v)

The SRA does not authorise notarial activities. This does not prevent individuals, in an SRA authorised firm, providing notarial services where personally authorised to do so by the Master of the Faculties within paragraph 7 of Schedule 2 to the LSA.

(vi)

See also Rule 8.4 of the SRA Authorisation Rules which provides that an authorised body may not carry on an activity unless through a body and individual who is authorised to carry on that activity.

Rule 9: Practising certificates

9.1

If you are practising as a solicitor (including in-house), whether in England and Wales or overseas, you must:

(a)

have in force a practising certificate issued by the SRA; or

(b)

be exempt under section 88 of the SA from holding a practising certificate.

9.2

You will be practising as a solicitor if you are involved in legal practice and:

(a)

your involvement in the firm or the work depends on your being a solicitor;

(b)

you are held out explicitly or implicitly as a practising solicitor;

(c)

you are employed explicitly or implicitly as a solicitor; or

(d)

you are deemed by section 1A of the SA to be acting as a solicitor.

9.3

In 9.2 above "legal practice" includes not only the provision of legal advice or assistance, or representation in connection with the application of the law or resolution of legal disputes, but also the provision of other services such as are provided by solicitors.

9.4

If you are a solicitor who was formerly an REL, and you are practising from an office in the UK as a lawyer of an Establishment Directive profession, you must have in force a practising certificate issued by the SRA, even if you are not practising as a solicitor.

Guidance notes

(i)

Rule 9 includes, in rule form, the requirements of sections 1 and 1A of the SA. The issuing of practising certificates under that Act is the responsibility of the SRA. For further guidance on the need for a practising certificate see our website.

(ii)

If you practise as a solicitor, whether in a firm or in-house, without having a practising certificate, you will commit a criminal offence, as well as a breach of the rules, unless you are entitled to rely on the exemption in section 88 of the SA.

Rule 10: Sole practitioners

10.1

If you are a solicitor or REL you must not practise as a sole practitioner unless:

(a)

the SRA has first authorised you as a recognised sole practitioner by endorsing your practising certificate or certificate of registration to that effect;

(b)

your practice falls within 10.2 below and you are therefore exempt from the obligation to be a recognised sole practitioner; or

(c)

you are authorised to practise as a sole practitioner by an approved regulator other than the SRA.

10.2

For the purpose of 10.1(b) above you are exempt from the obligation to be a recognised sole practitioner if:

(a)

your practice is conducted entirely from an office or offices outside England and Wales;

(b)

your practice consists entirely of work as a temporary or permanent employee and any firm which employs you takes full responsibility for you as an employee; or

(c)

your practice consists entirely of:

(i)

providing professional services without remuneration for friends, relatives, companies wholly owned by you or your family, or registered charities; and/or

(ii)

administering oaths and statutory declarations; and/or

(iii)

activities which could constitute practice but are done in the course of discharging the functions of any of the offices or appointments listed in paragraph (c) of the definition of "Private practice" in Appendix 4 to the SRA Indemnity Insurance Rules.

Guidance note

(i)

Until 31 March 2012 or the date on which an order made pursuant to section 69 of the LSA relating to the status of sole practitioners comes into force, whichever is the later, see regulation 4 of the SRA Practising Regulations. After that, see the SRA Authorisation Rules.

Rule 11: Participation in legal practice

11.1

If you are a solicitor, REL or RFL and you are:

(a)

a manager, member or interest holder of:

(i)

a recognised body; or

(ii)

a body corporate which is a European corporate practice and is a manager of a recognised body; or

(b)

a manager, member or owner of:

(i)

a licensed body; or

(ii)

a body corporate which is a European corporate practice and is a manager of a licensed body;

it must be in your capacity as a solicitor, REL or RFL (whether or not you are held out as such);

(c)

employed in connection with the provision of legal services in England and Wales, by:

(i)

a recognised sole practitioner; or

(ii)

an authorised body;

it must be in your capacity as a solicitor, in accordance with section 1A of the SA, an REL or an RFL (whether or not you are held out as such);

(d)

Practising in accordance with (a), (b) or (c) above does not prevent you from practising also as an individual authorised by an approved regulator other than the SRA or providing services as a member of a non-lawyer profession.

11.2

Subject to 11.3 below, if you are a solicitor, REL or RFL and you are:

(a)

a manager, member or interest holder of:

(i)

an authorised non-SRA firm which is not licensed under Part 5 of the LSA; or

(ii)

a body corporate which is a manager of such an authorised non-SRA firm;

(b)

a manager, member or owner of an authorised non-SRA firm which is licensed under Part 5 of the LSA; or

(c)

an employee who is employed in connection with the provision of legal services in England and Wales, by an authorised non-SRA firm;

it must be in your capacity as a solicitor, REL or RFL or as an individual authorised by an approved regulator other than the SRA (whether or not you are held out as such) but this does not prevent you from practising in both capacities or providing services as a member of a non-lawyer profession in addition to practising as a lawyer.

11.3

If you are a solicitor who is employed by, or is a director of, an authorised non-SRA firm, section 1A of the SA will require you to practise through that firm in the capacity of solicitor, even if also practising in some other capacity.

11.4

No solicitor or REL, while a prisoner in any prison, may commence, prosecute or defend any action, suit or other contentious proceedings, or appear as an advocate in any such proceedings, unless he or she does so as a litigant in person and not as a solicitor or REL.

Guidance note

(i)

A solicitor, REL or RFL is required to be involved in a recognised body in that capacity even if they merely have a small interest in the firm. There is greater flexibility in licensed bodies where a solicitor, REL or RFL is permitted to have a small share in a licensed body without being treated as practising merely because of that involvement. For example, a solicitor could have a small interest in a licensed body through a pension fund even though not practising.

Rule 12: Persons who must be "qualified to supervise"

12.1

The following persons must be "qualified to supervise":

(a)

a recognised sole practitioner;

(b)

one of the lawyer managers of an authorised body or of a body corporate which is a legally qualified body and which is a manager of the authorised body;

(c)

one of the solicitors or RELs employed by a law centre in England and Wales, unless the law centre is licensed under Part 5 of the LSA in which case the provisions in Rule 12.1(b) will apply; or

(d)

one in-house solicitor or in-house REL in any department in England and Wales where solicitors and/or RELs, as part of their employment:

(i)

do publicly funded work; or

(ii)

do or supervise advocacy or the conduct of proceedings for members of the public before a court or immigration tribunal.

12.2

To be "qualified to supervise" for the purpose of 12.1 a person must:

(a)

have completed the training specified from time to time by the SRA for this purpose; and

(b)

be a practising lawyer, and have been entitled to practise as a lawyer for at least 36 months within the last ten years; and

must be able to demonstrate this if asked by the SRA.

12.3

The following persons must ensure that their firm has at least one manager who is practising as a lawyer and has been entitled to practise as a lawyer for a minimum of 36 months within the last 10 years:

(a)

a solicitor manager of a firm which is not an authorised body and which is practising from an office outside England and Wales, and solicitors control the firm, either directly as partners, members or interest holders, or indirectly by their ownership of bodies corporate which are partners, members or interest holders; and

(b)

a solicitor or REL manager of a firm which is not an authorised body and which is practising from an office in Scotland or Northern Ireland, and solicitors and/or RELs control the firm, either directly as partners, members or interest holders, or indirectly by their ownership of bodies corporate which are partners, members or interest holders.

12.4

You must not set up as a solicitor sole practitioner outside England and Wales, or as an REL sole practitioner in Scotland or Northern Ireland, unless you have been entitled to practise as a lawyer for a minimum of 36 months within the last 10 years.

Guidance notes

(i)

The person "qualified to supervise" under Rule 12.2 does not have to be personally entitled by law to supervise all work undertaken by the firm. Responsibility for the overall supervision framework, including compliance with legal supervisory requirements, rests with the authorised body and its managers, or the recognised sole practitioner.

(ii)

In satisfying the requirement for 36 months entitlement to practise you can for example rely on a period as a lawyer of another jurisdiction. In calculating the 36 months, any period of entitlement to practise as a lawyer of another jurisdiction can be taken into account in addition to your time entitled to practise as a solicitor.

(iii)

Waivers may be granted in individual cases. See Rule 21.

(iv)

The training presently specified by the SRA is attendance at or participation in any course(s), or programme(s) of learning, on management skills involving attendance or participation for a minimum of 12 hours. The courses or programmes do not have to be CPD accredited in order to satisfy the requirement. It is not normally necessary to check with the SRA before undertaking a course or programme unless the course is unusual and outside the mainstream of management training. Advice may be sought from the Professional Ethics Guidance Team.

(v)

Controlling the firm in Rule 12.3 means constituting the largest (or equal largest) share of control of the firm either as individual managers or by their share in the control of bodies which are managers.

Part 3: Formation and eligibility criteria for recognised bodies and licensed bodies

Rule 13: Eligibility criteria and fundamental requirements for recognised bodies

13.1

To be eligible to be a recognised body, a body must be a legal services body namely a partnership, company or LLP of which:

(a)

at least one manager is:

(i)

a solicitor with a current practising certificate, or

(ii)

an REL, or

(iii)

(in the case of a partnership or LLP) a body corporate which is a legally qualified body with at least one manager who is a solicitor with a current practising certificate or an REL; and

(b)

all of the managers and interest holders are lawyers and legally qualified bodies.

Services requirement

13.2

The business of a recognised body may consist only of the provision of:

(a)

professional services of the sort provided by individuals practising as solicitors and/or lawyers of other jurisdictions; and

(b)

professional services of the sort provided by notaries public, but only if a notary public is a manager or employee of a recognised body,

but this does not prevent a recognised body providing services within Chapter 12 (Separate businesses) of the SRA Code of Conduct, or holding an interest in a company which is a separate business.

Guidance notes

(i)

Although most organisations which involve non-lawyers as managers or interest holders must be licensed bodies, there is a limited exception under section 72(2) of the LSA which permits a small degree of non-lawyer involvement in recognised bodies. Where one or more bodies are involved in a firm as a manager or owner/interest holder, and in those bodies non-authorised persons have only a de minimis (less than 10%) control by way of voting rights, then the firm will remain a legal services body requiring recognition under the AJA. Where the control is 10% or more, the firm will be a licensable body.

(ii)

The services requirement in 13.2 should be read in conjunction with Chapter 12 of the SRA Code of Conduct. Certain services which could be offered through a "permitted separate business" (see Chapter 12) can also be provided in conjunction with a firm or in-house practice whilst still complying with the services requirement in 13.2. These services, which extend or fall outside the scope of the professional services mentioned in 13.2, are:

(a)

education and training activities; and

(b)

authorship, journalism and publishing.

Rule 14: Eligibility criteria and fundamental requirements for licensed bodies

14.1

To be eligible to be a licensed body, a body must comply with the lawyer manager requirement set out in Rule 14.2 below and be a "licensable body", as defined under section 72 of the LSA, and as set out in Rule 14.3 to 14.6 below.

14.2

At all times at least one manager of a licensed body must be an individual who is:

(a)

a solicitor with a current practising certificate;

(b)

an REL;

(c)

a lawyer of England and Wales and who is authorised by an approved regulator other than the SRA; or

(d)

registered with the BSB under regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (SI 2000/1119).

14.3

A body ("B") is a licensable body if a non-authorised person:

(a)

is a manager of B, or

(b)

is an interest holder of B.

14.4

A body ("B") is also a licensable body if:

(a)

another body ("A") is a manager of B, or is an interest holder of B, and

(b)

non-authorised persons are entitled to exercise, or control the exercise of, at least 10% of the voting rights in A.

14.5

A body may be a licensable body by virtue of both 14.3 and 14.4.

14.6

For the purposes of this rule, a non-authorised person has an indirect interest in a licensable body if the body is a licensable body by virtue of 14.4 and the non-authorised person is entitled to exercise, or control the exercise of, voting rights in A.

Rule 15: Formation, registered office and practising address

15.1

An authorised body which is a partnership may be formed under the law of any country and may be a legal person.

15.2

An authorised body which is an LLP must be incorporated and registered in England and Wales, Scotland or Northern Ireland under the Limited Liability Partnerships Act 2000.

15.3

An authorised body which is a company must be:

(a)

incorporated and registered in England and Wales, Scotland or Northern Ireland under Parts 1 and 2 of the Companies Act 2006;

(b)

incorporated in an Establishment Directive state and registered as an overseas company under Part 34 of the Companies Act 2006; or

(c)

incorporated and registered in an Establishment Directive state as a societas Europaea.

15.4

An authorised body must have at least one practising address in England and Wales.

15.5

An authorised body must have its registered office at a practising address in England and Wales if the authorised body is registered in England and Wales:

(a)

under Parts 1 and 2 of the Companies Act 2006;

(b)

under the Limited Liability Partnerships Act 2000; or

(c)

as a societas Europaea.

Rule 16: Composition of an authorised body

16.1

Provided that the requirements for all authorised bodies set out in Rule 13 or Rule 14, as appropriate, are met, an authorised body may have all or any of the following as a partner (if it is a partnership), a member (if it is an LLP), or a director, member or shareowner (if it is a company):

(a)

a lawyer of England and Wales (including a solicitor with a current practising certificate);

(b)

an REL;

(c)

an RFL;

(d)

an EEL;

(e)

in the case of a partnership or an LLP, a body corporate which is a legally qualified body;

(f)

in the case of a company, a legally qualified body, save that only an individual may be a director of a recognised body which is a company;

provided that, where necessary, they comply with the approval requirements in Part 4 of the SRA Authorisation Rules.

16.2

If the authorised body is a licensed body, then the list of permitted partners, members of an LLP or, in the case of a company, directors, registered members or shareowners at 16.1(a) to (f) shall include:

(a)

a licensed body or another body licensed under Part 5 of the LSA by an approved regulator other than the SRA; and

(b)

any other individual or body corporate;

subject to any necessary approval as a manager or owner under Part 4 (Approval of managers, owners and compliance officers) of the SRA Authorisation Rules, save that only an individual may be a director of a licensed body which is a company.

16.3

An authorised body which is an LLP must have at least two members.

Guidance notes

(i)

See 22.3 below regarding the position of firms which have non-lawyer managers prior to 6 October 2011.

(ii)

Although a legal services body can have a variety of types of manager, only a solicitor or an REL may be a sole practitioner.

(iii)

Where, in line with Rule 16, a firm has persons other than solicitors as managers (in particular where European lawyers are involved), any list of the managers will need to:

(a)

identify any solicitor as a solicitor;

(b)

in the case of any lawyer or notary of an Establishment Directive state other than the UK:

(A)

identify the jurisdiction(s) - local or national as appropriate - under whose professional title the lawyer or notary is practising;

(B)

give the professional title(s), expressed in an official language of the Establishment Directive state(s) concerned; and

(C)

if the lawyer is an REL, refer to that lawyer's registration with the SRA;

(c)

indicate the professional qualification(s) of any other lawyer and the country or jurisdiction of qualification of any RFL not included in (b) above;

(d)

identify any individual non-lawyer as a non-lawyer; and

(e)

identify the nature of any body corporate, if this is not clear from its name.

In addition, whenever an REL (whether or not a manager) is named on letterhead used in England and Wales by any firm or in-house practice, the firm or the employer will need to follow the guidance in (iii)(b) above.

Rule 17: Authorised bodies which are companies

Record of non-member shareowners

17.1

Keeping a record

(a)

A recognised body which is a company with shares must keep a record of any non-member interest holders, and retain the record for at least three years after their interest ceases;

(b)

A licensed body which is a company with shares must keep a record of any non-member owners, and retain the record for at least three years after their ownership ceases.

17.2

A member who holds a share as nominee for a non-member shareowner in an authorised body must keep the authorised body informed of all facts necessary to keep an accurate and up-to-date record in accordance with Rule 17.1.

Rule 18: Information and documentation

18.1

An authorised body must supply any information and documentation relating to its composition and structure or to any of its managers, employees, members or shareowners, as and when requested to do so by the SRA.

18.2

Notwithstanding any requirement to obtain approval of a manager, owner, COLP or COFA under Part 4 of the SRA Authorisation Rules, an authorised body must notify the SRA within seven days of any change to its:

(a)

name;

(b)

registered office and/or any of its practising addresses;

(c)

managers ;

(d)

interest holders , if it is a recognised body, and in the case of a recognised body which is a company, this includes members and shareowners;

(e)

owners , if it is a licensed body, and in the case of a licensed body which is a company, this includes members and shareowners;

(f)

COLP ; or

(g)

COFA .

18.3

An authorised body must notify the SRA within seven days if it is an unlimited company and it is re-registered as limited under the Companies Acts.

18.4

If a relevant insolvency event occurs in relation to an authorised body its managers, or in the case of an authorised body which is an overseas company, its directors, must notify the SRA within seven days.

Guidance notes

(i)

There are other SRA reporting and information requirements that apply to individuals or firms. See for example:

(a)

Rules 3, 8.7, 8.8, 8.9 and 8.10 and 18, 23, 24 and 25 of the SRA Authorisation Rules

(b)

Rule 32 of the SRA Accounts Rules

(c)

Regulations 1.2, 4.3, 4.5, 4.8, 4.12, 4.13 and 15 of the SRA Practising Regulations

(d)

Chapter 10 of the SRA Code of Conduct.

(ii)

In addition to the requirement to inform the SRA when certain persons leave the firm, there are the requirements in Rule 8 of the SRA Authorisation Rules for firms to seek approval, where necessary, before certain persons join the firm. This is more onerous than simply informing the SRA of changes that have taken place.

Part 4: Compliance with practice requirements

Rule 19: Compliance with practice requirements

19.1

An authorised body and its managers and employees must at all times ensure that they act in accordance with the requirements of the SRA's regulatory arrangements as they apply to them.

19.2

A solicitor, REL or RFL who is a member or shareowner of an authorised body which is a company must not cause, instigate or connive at any breach of the requirements imposed under the SRA's regulatory arrangements by the authorised body or any of its managers or employees.

19.3

An employee of an authorised body must not cause, instigate or connive at any breach of any requirements imposed under the SRA's regulatory arrangements.

19.4

The partners in an authorised body which is a partnership are responsible not only as managers but also, jointly and severally, as the authorised body.

Rule 20: Overseas practice

20.1

Subject to Rule 20.2 to 20.4, the requirements in these rules apply to the overseas practice of a solicitor, REL, RFL or authorised body.

20.2

The rules in Part 2 and Rules 17.2, 18.4, 19 and 21 apply to your overseas practice as:

(a)

a manager of an authorised body, if you are a lawyer of England and Wales or an individual non-lawyer;

(b)

a member or shareowner of an authorised body which is a company, if you are a solicitor or (in relation to practice from an office in Scotland or Northern Ireland) an REL,

except that Rule 19 applies only to the extent that it applies to the authorised body, manager or employee by virtue of these rules or Chapter 13 (Application and waivers provisions) of the SRA Code of Conduct.

20.3

If you are a solicitor or an REL you are not required to comply with Rule 13 or Rule 14, as appropriate, in order to practise through a firm which has no office in England and Wales, but you must comply with Rule 1 and Rule 2.

20.4

If compliance with any applicable provision of these rules would result in your breaching local law, you may disregard that provision to the extent necessary to comply with that local law.

Rule 21: Waivers

21.1

Subject to provisions relating to any statutory obligations or the SRA's regulatory arrangements affecting its ability to waive any requirements, the SRA Board shall have power to waive in writing the provisions of these rules for a particular purpose or purposes expressed in such waiver, and to attach conditions to or revoke such waiver, at its own discretion.

Guidance note

(i)

An applicant for a waiver must satisfy the SRA that the circumstances are sufficiently exceptional to justify a departure from the requirements of the rule in question, bearing in mind its purpose. Applications should be made to the Professional Ethics Guidance Team.

Rule 22: Transitional provisions and grace period

22.1

From 31 March 2012 or the date on which an order made pursuant to section 69 of the LSA relating to the status of sole practitioners comes into force, whichever is the later, these rules shall have effect subject to the following amendments:

(a)

Rules 1.1(a), 2.1(a), 3.1(a), 8.7, 11.1(c)(i) and 12.1(a) shall be omitted;

(b)

In Rules 1.1(b) and 2.1(b) the words, "authorised as a sole practitioner" shall be substituted for the words "a recognised sole practitioner";

(c)

In Rules 1.2(a) and 2.2(a) the words "as a recognised body" shall be substituted for the words "a recognised sole practitioner";

(d)

In Rule 3.2(d) the words "a recognised sole practitioner," shall be omitted;

(e)

In Rules 5.1(d) and 5.2(c) the words "or by a recognised sole practitioner" shall be omitted;

(f)

In Rules 6.1 and 7.1 the words "or an employee of a recognised sole practitioner" shall be omitted;

(g)

In Rule 10.1(a) the word "recognised" shall be omitted and the words "by endorsing your practising certificate or certificate of registration to that effect" shall be omitted;

(h)

In Rules 10.1(b) and 10.2 the words "authorised as a" shall be substituted for the words "a recognised";

(i)

In Rule 12.1(b), the words "a lawyer manager" shall be substituted for the words "one of the lawyer managers"; and

(j)

Rule 13.1 shall have effect as if the words "sole practitioner," were inserted after the words "namely a".

22.2

Unless the context otherwise requires, references in these rules to:

(a)

these rules, or a provision of these rules; and

(b)

the SRA Code of Conduct, rules, regulations or regulatory arrangements, or a provision of the same,

include a reference to the equivalent rules, regulations or provisions previously in force.

22.3

A body that has, at the time these rules come into force, been recognised by the SRA under section 9 AJA and that does not comply with Rule 13.1(b) above shall continue to be treated as a legal services body for the purposes of these rules and the SRA's regulatory arrangements until:

(a)

such time as it ceases to comply with the management and control requirements set out in Rule 22.4 below; or

(b)

the end of the transitional period under Part 2 of Schedule 5 to the LSA, or such earlier time as the body may elect,

at which time it shall be a licensed body for the purposes of these rules and the SRA's regulatory arrangements.

22.4

The management and control requirements referred to in Rule 22.3 above are:

(a)

At least 75% of the body's managers must be:

(i)

individuals who are, and are entitled to practise as, lawyers of England and Wales, lawyers of Establishment Directive professions or RFLs; or

(ii)

bodies corporate which are legally qualified bodies;

although a legally qualified body cannot be a director of a body which is a company;

(b)

Individuals who are, and are entitled to practise as, lawyers of England and Wales, lawyers of Establishment Directive professions or RFLs must make up at least 75% of the ultimate beneficial ownership of the body; and

(c)

Individuals who are, and are entitled to practise as, lawyers of England and Wales, lawyers of Establishment Directive professions or RFLs, and/or legally qualified bodies, must:

(i)

exercise or control the exercise of at least 75% of the voting rights in the body; and

(ii)

if the body is a company with shares, hold (as registered members of the company) at least 75% of the shares.

(d)

Subject to Rule 13.1(b) above, every interest holder of the recognised body, and every person who exercises or controls the exercise of any voting rights in the body, must be:

(i)

an individual who is, and is entitled to practise as, a lawyer of England and Wales, a lawyer of an Establishment Directive profession or an RFL;

(ii)

a legally qualified body; or

(iii)

an individual who is approved under regulation 3 of the SRA Recognised Bodies Regulations 2009, regulation 5 of the SRA Recognised Bodies Regulations 2011 or Part 4 of the SRA Authorisation Rules and, subject to (e) below, is a manager of the body.

(e)

An individual who is not entitled under (d)(i) above may be an interest holder of a recognised body without being a manager of the body if:

(i)

the recognised body is a company which is wholly or partly owned by a partnership or LLP which is a legally qualified body;

(ii)

the individual is approved under regulation 3 of the SRA Recognised Bodies Regulations 2009, regulation 5 of the SRA Recognised Bodies Regulations 2011 or Part 4 of the SRA Authorisation Rules and is a manager of the partnership or LLP; and

(iii)

the individual is precluded under the partnership agreement or members' agreement from exercising or authorising any vote in relation to the company.

For the purposes of Rule 22.4 and for the purposes of section 9A(6)(h) and (6C) of the AJA "legally qualified body" means a body which would meet the services requirement in Rule 13.2 and is:

(A)

a recognised body;

(B)

an authorised non-SRA firm of which individuals who are, and are entitled to practise as, lawyers of England and Wales, lawyers of Establishment Directive professions or RFLs make up at least 75% of the ultimate beneficial ownership; or

(C)

a European corporate practice which is a lawyers' practice and is a body incorporated in an Establishment Directive state, or a partnership with separate legal identity formed under the law of an Establishment Directive state:

(I)

which has an office in an Establishment Directive state but does not have an office in England and Wales;

(II)

whose ultimate beneficial owners include at least one individual who is not a lawyer of England and Wales but is, and is entitled to practise as, a lawyer of an Establishment Directive profession;

(III)

whose managers include at least one such individual, or at least one body corporate whose managers include at least one such individual;

(IV)

75% of whose ultimate beneficial ownership is in the hands of individuals who are, and are entitled to practise as, lawyers of Establishment Directive professions, lawyers of England and Wales, and/or RFLs; and

(V)

75% of whose managers comprise such individuals, and/or bodies corporate 75% of whose managers comprise such individuals.

22.5

These rules shall not apply to licensable bodies until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA and all definitions shall be construed accordingly.

22.6

In these rules references:

(a)

in the preamble to the rules being made under section 83 and Schedule 11 to the Legal Services Act 2007;

(b)

to COLPs and COFAs; and

(c)

to the approval of managers, owners, COLPs and COFAs;

shall have no effect until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA.

22.7

Until the 180th day after the date on which the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA:

(a)

[Deleted];

(b)

Rule 4.13 (insurers) shall have no effect;

(c)

Rule 13.06 (insurers) of the Solicitors' Code of Conduct 2007 shall continue to have effect; and

(d)

references to Rule 4.13 shall be treated as references to Rule 13.06 of the Solicitors' Code of Conduct 2007.

Part 5: Interpretation

Rule 23: Interpretation

23.1

The SRA Handbook Glossary 2012 shall apply and, unless the context otherwise requires:

(a)

all italicised terms shall be defined; and

(b)

all terms shall be interpreted,

in accordance with the Glossary.