Setting up in practice, whether on your own or in partnership or conjunction with others is a serious step to take and should never be undertaken lightly. It is not something which you can, or should, do without a great deal of thought and forward planning and you should be especially aware of the fact that, as with marriage, it is not always as easy to undo as it was to do.
Aside from the various regulatory requirements which we will look at below, there are a number of basic questions that you must ask yourself before you begin. If you cannot give yourself good answers to them, then you should think seriously about abandoning your plans before they get any further. Those questions include:
A good starting place is often to undertake a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis both of your plans and the firm as you see it developing. Be realistic in doing this and don’t assume that anyone owes you a living. Whether or not you intend to look for a bank loan to fund the set up costs, prepare a realistic business plan. Consider precisely:
The next matter to which you will need to give some consideration is the structure of your practice.
There are currently a number of vehicles through which a solicitor can practice, some of which have arisen recently with the passing of the Legal Services Act 2007. Whilst more detail can be found in the Practice Structures section elsewhere on this web site, the issues you should be considering here are:
You will find more information about all of these aspects elsewhere on this web site. Alternatively, call the Lawyers Defence Group and we will assist you in going through the necessary preliminary steps.
Assuming that you have done all of the preparatory work in terms of planning your practice, you now need to turn your attentions to ensuring that you have complied with the various regulatory requirements. Many of these will be dealt with in more depth elsewhere on this web site. Please note that this is not necessarily a comprehensive list as there may be other requirements with which you must comply depending upon the nature of the work which you intend to undertake.
This may seem an obvious question, but it is not necessarily as obvious as you may think. You may indeed have a practising certificate (in fact, if you do not then you cannot practise as a solicitor at all – whether in your firm or elsewhere – see section dealing with practising certificates elsewhere on this web site), but unless you are “qualified to supervise” as required by rule 12 of the SRA Practice Framework Rules 2011 then you may not be able to practise on your own or, indeed, as a lawyer manager of a recognised body where at least one other person is not so qualified.
To be qualified to supervise, you or one of the other managers must have:
For more information see rule 12 and the guidance notes thereto or contact the Lawyers Defence Group for more information.
The simple answer is yes – unless you are a Registered European Lawyer and are able to apply for a written exemption. The SRA Indemnity Insurance Rules require that you or your recognised body have in place qualifying insurance before your business starts up. This must be obtained from a qualifying insurer. Note that although it used to be possible to be insured through the Assigned Risks Pool that now, new businesses are no longer entitled to take that route (see Solicitors’ Professional Indemnity Insurance elsewhere on this web site).
Do not assume that you will automatically get professional indemnity insurance – many insurers are being selective as to whom they will insure – and that you are fully aware of the likely cost of that insurance. It may be substantially more expensive than you think.
The rules on the naming of practices are substantially more flexible than they use to be prior to the introduction of Outcomes Focused Regulation. Any name that you choose must, however, comply with the provisions set out in Chapter 8 of the SRA Code of Conduct, in particular outcomes O(8.1) and O(8.5) which state:
“O(8.1) – your publicity in relation to your firm or in-house practice or for any other business is accurate and not misleading, and is not likely to diminish the trust the public places in you and in the provision of legal services;”
“O(8.5) – your letterhead, website and e-mails show the words “authorised and regulated by the Solicitors Regulation Authority” and either the firm’s registered name and number if it is an LLP or company or, if the firm is a partnership or sole practitioner, the name under which it is licensed/authorised by the SRA and the number allocated to it by the SRA.”
In this regard, you should also be aware of indicative behaviours IB(8.10) and IB(8.11) which state:
“IB(8.10) – using a name or description of your firm or in-house practice that includes the word “solicitor(s)” if none of the managers are solicitors;”
“IB(8.11) – advertising your firm or in-house practice in a way that suggests that services provided by another business are provided by your firm or in-house practice;”
You must register the name under which you practice with the SRA and, if you intend to practice as an LLP or limited company, it must be registered at Companies House.
Among the other matters to which you should give consideration are:
Whatever the issue in relation to setting up in practice, the Lawyers Defence Group can assist you.
For further information, or to contact the Lawyers Defence Group about a problem which you have: