Impact evaluation of Solicitors Regulation Authority’s regulatory reform programme

The SRA has delivered significant regulatory reform to the legal market in recent years, key developments have included the introduction of:

  • Alternative Business Structures (ABSs) in 2012
  • Multi-Disciplinary Practices (MDPs) in 2014
  • the reformed separate business rule in 2015

To help the SRA understand the early impact of these changes, including identifying evidence of any benefits or unintended consequences, they commissioned the Centre for Strategy and Evaluation Services (CSES) and Dr Christopher Decker, of Oxford University, to conduct independent research evaluating the impact of these reforms.  The evaluation involved a literature review, focus groups and in-depth interviews with solicitors, law firms and legal service users.

Key findings

The impact of these reforms has been gradual and incremental. Early indications show that users of legal services are beginning to see benefits.

Introducing ABSs and MDPs, and removing restrictions on firm ownership, have allowed new entrants (including foreign law firms, firms owned by professional services firms, local authority owned firms and retail brands) into the market. This has resulted in improved access, choice and quality of service for legal service users and innovation in provision.

There was no evidence to suggest that these reforms have detrimentally impacted, or resulted in a greater risk to, users of legal services.

Licensing of Alternative Business Structures

  • Extending law firm ownership to include non-lawyers has contributed to the improvement of the financial stability of some law firms through attracting, promoting and retaining people with corporate management skills and encouraging external investment.
  • ABSs appear more innovative than other types of law firm. According to a 2015 survey, conducted by Enterprise Research Centre, ABSs are particularly likely to have delivered radical service innovations or organisational innovations in the last three years, compared with non-ABSs.
  • Many ABSs have targeted a mass market, including users of legal services who have lost access to legal aid. This should increase the diversity of people using solicitors, improve access and promote inclusion.
  • Regulatory data shows that ABSs do not pose a greater risk to users of legal services, when compared with other firm structures and business models.

Licensing of Multi-Disciplinary Practices

People, particularly clients of accountancy and other professional service providers, are benefiting from a more integrated service offer by not having to engage a law firm separately.

Where parts of an MDPs business are overseen by other regulators, there is as much, or even more, protection for users of legal services.

Revision of the separate business rule

Revision of the separate business rule has allowed new providers to enter the legal services market without requiring a complex set of waivers to existing rules.

Firms that are connected to a separate business do not pose a greater risk to users of legal services, when compared with other firms.

Download and read the full report

Brought to you by ICLR.