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I have recently been asked to explain the difference between a qualified practising solicitor and someone who starts up a business giving legal advice and selling legal documents for which they charge a fee to the customer. To all outwards appearances it may seem that such businesses are pretty much the same as the legal practices run by solicitors, and laypeople understandably might assume that what they get is the same whoever provides the service. This is a topical issue at the moment given that it is proposed that some legal services which at the moment can legally only be carried out by regulated practising solicitors should be deregulated so that anyone can offer these services to the paying general public, and that some legal services which have not previously been limited to solicitors should now become regulated for the protection of the general public.
Many people are unaware that at the present time, an individual who has no legal training or qualifications may set up a company or business offering to sell legal advice and documents to the general public on a wide range of legal matters and without being subject to any sort of regulation or standards monitoring or financial control. Whilst there are presently some types of legal work which can legally only be carried out by qualified solicitors, for example representing clients in court and making probate applications, there are also a number of areas where unregulated legal businesses can legitimately operate. One particular area where this is true is will writing and associated services such as the provision of powers of attorney.
There is no legal framework in place to regulate or control legal services businesses or the individuals who run them or to monitor the quality and the accuracy of the work that they produce. This is a matter of some concern particularly to those of us who are legally qualified and who are bound by strict regulations and financial controls and given that so much of this work is, by its nature, work that is carried out on behalf of elderly or otherwise vulnerable people.
Solicitors are highly regulated by the Solicitors Regulation Authority which is an independent body which regulates the solicitors’ profession and who set out the mandatory framework within which all firms of solicitors must operate. It requires all solicitors to adhere to a code of conduct, to submit to financial audit annually and to observe regulations for financial control and conduct and fair dealing with clients. Solicitors have no choice about this and are obliged to observe all rules and regulations governing the profession. There is also an absolute requirement for all solicitors to have full professional indemnity insurance so that there is cover in the event that a solicitor makes a mistake which causes loss to a client. Sanctions can and are imposed where solicitors fail to comply with these mandatory obligations and these range from formal reprimands which are noted on a solicitor’s record to fines and ultimately, to striking off the role. None of these regulations apply to the unregulated sector and there is no requirement for none regulated legal businesses to have any kind of insurance in place and there are no sanctions for failures or misconduct.
Solicitors must also follow mandatory practice rules, especially in relation to elderly clients to ensure that vulnerable people are acting of their own free will and are not being forced or coerced or misled by a third party; solicitors are required to consider and assess the mental capacity of the client to understand the document he or she is signing and to make the decision to sign a will or grant a power of attorney or indeed to enter into any other sort of financial transaction. There is no such requirement for unregulated advisers and no competency test or qualification requirement for unregulated advisers to demonstrate that they have the necessary knowledge and skill to assess mental capacity.
Solicitors cannot benefit under a will which they have drafted or which may have been drafted by a colleague in the same practice except in extremely limited circumstances so that no advantage can taken of an elderly client who may not have full mental capacity or who may have no relatives to keep an eye on their financial affairs. There have been a number of convictions recently where non-solicitor legal advisers have been jailed for taking advantage of elderly people by benefitting under wills that they have drafted in their own favour.
Solicitors are required to undertake a minimum of 16 hours of ongoing mandatory training each year after qualification, at some cost. Most solicitors exceed this requirement each year. Failure to undertake the minimum requirement would result in a solicitor losing his or her practising certificate and not being able to work at all. Unregulated businesses have no such requirement and no risk to their livelihood if they do not undertake any training. There is no body or authority to oversee ongoing training or verify any representations that may be made to the general public about qualifications or ongoing training for those who run legal services companies.
Qualified solicitors must spend a minimum of six years training before they are entitled to call themselves solicitors and most of them will tell you that achieving qualification is just the starting point; it takes years of experience after qualification to achieve a thorough understanding and high level of competence. There is at the moment no qualification requirement for unregulated legal advisers at all. Furthermore, the Solicitors Regulation Authority rules require that once someone qualifies as a solicitor they must then work under supervision in a solicitor’s office for a minimum of three years before they can establish their own legal business conducting regulated legal work without the supervision of a senior solicitor. Where someone who has qualified as a solicitor wishes to set up a legal services company within three years of qualification, they must not act as a solicitor and they must not mislead the public into thinking that they are acting as a qualified solicitor whether directly or indirectly.
This regulation and control by the Solicitors Regulation Authority has been portrayed as “red tape” or “bureaucracy” by some none regulated legal advisers who seek to make a virtue out of the fact that they are not subject to this rigid regulation. Most solicitors do not relish the restrictions of regulation or the significant sums they are obliged to pay for regulation and financial control and would rather that it was not necessary because frankly, it would make all of our lives a lot easier not to have to comply with codes of conduct and fork out for large insurance premiums each year. But, the regulation is not there for our benefit; it is there for the protection and benefit of the general public at large and most solicitors recognize that this is what sets us apart from the unregulated sector and justifies the general public’s confidence in the integrity of our profession.
At the moment solicitors do not find themselves on a level playing field. We know that we for the most part are highly qualified professionals acting under a regulatory and financial framework designed to protect the general public, and unregulated legal advisers are not. Most solicitors therefore welcome and support the Legal Services Board’s recent announcement that all will writing activity and probate work is to be brought into legal regulation, probably by the Solicitors Regulation Authority, who will be empowered to impose and insist upon the same professional and regulatory standards from non solicitor legal advisers as are currently required from solicitors.