For the first time in history, both businesses and consumers can choose how they access the law and how much they pay through our innovative new model. We’re putting our clients back in the driver’s seat by giving them the choice to instruct us on a regulated basis or an unregulated basis.
But which is the best choice for you?
As innovators in the industry, we believe it’s up to us to raise awareness about the differences between regulated and unregulated legal providers to ensure the public have a strong understanding of their rights in both circumstances.
To answer the question, we think a bit of background information is essential.
A brief history of the law
The act of legal representation traces its roots back to Ancient Greece, where it was originally determined that a person accused of a crime could appoint an “orator” to speak on their behalf. Orators were skilled in rhetoric and advocacy, providing defendants with the choice to have their case presented professionally to a judge.
By law, an orator was prohibited from charging a fee for their service, but this soon became a common practice amongst advocates. As a result of the growing need for skilled advocates, regulation became an exigency in the profession. Soon, what began as an unpaid and unregulated group of policymakers and orators was reformed into a tightly regulated system under the reign of Emperor Claudius, who lifted the ban on legal fees.
By the fourth century, the legal profession was transformed once more. In the East, advocates became true lawyers; in the sense that they had to be enrolled on the bar of a court to argue before it. Following this change, Emperor Leo imposed a requirement that new advocates seeking admission had to produce testimonials from their teachers; and by the sixth century, a regular course of legal study lasting four years was required for admission.
This development carried on until the onset of the Dark Ages, whereby the profession experienced a complete collapse. However, the turn of the thirteenth century saw a crucial shift as men began to practice law as their lifelong profession, and as a result, the legal profession began to recover.
Renewed effort from both church and state was critical in the reformation of regulation in the profession, and in 1231, two French councils mandated that lawyers were to swear an oath before practising in court. Later, in 1237, a similar statute was established in London. By 1275, professional lawyers faced punishment if found guilty of deceit, and the mayor's courts of London promulgated regulations regarding admission to the profession.
Regulation in the legal industry
The legal profession has certainly come a long way since the 12th century, currently employing over 370,000 people in the UK and contributing nearly £25.7bn to the economy a year. However, just as regulation was important to the profession in Ancient Greece, the need for a strong regulatory framework continues to be necessary in today’s society in order to protect the interests of the public.
Following the Clementi review in 2004, the Legal Services Act 2007 was introduced with the aim of achieving a new regulatory framework that promoted innovation and competition in the market while representing the public and consumer interest. The Act set out certain overarching principles for the regulation of the English Legal profession and reorganised the regulatory process itself. This involved the creation of the Legal Services Board (LSB), an independent body responsible for overseeing legal regulators in England and Wales named in the Act as an‘Approved Regulator’.
While The Law Society were also named as an Approved Regulator, the Act required regulation to be separate from representation, and so their regulatory powers were delegated to a new independent regulatory body: the Solicitors Regulation Authority (SRA). In order to obtain regulatory status, legal professionals now needed to register their firm with the SRA. Core Principles established by the SRA defined the professional standards they expect from all regulated firms and alongside it, sanctions that would be imposed on those who did not comply.
Innovation in the legal industry
As well as meeting the promise of consumer protection, the Legal Services Act 2007 saw the establishment of the Alternative Business Structure (ABS), a new legal entity that allows non-lawyers to manage and have a financial stake in a firm. Now, law firms can become part of multinational companies and similarly, multinationals can form and run their own law firm.
These regulatory improvements have helped to broaden and diversify the market; and since the Act was instated, over 400 ABS’s have been approved by the SRA: BT, The AA and The Co-operative Group to name but a few. Simultaneously, the rise in unregulated firms has been significant: according to data from the LSB, the number of unregulated individuals conducting legal activities was estimated to be in excess of 130,000 in 2010.
Businesses and consumers now have access to legal services at a much lower cost - in some cases, due to a low percentage of staff being qualified lawyers - but in others, due to the intelligent use of legal technology to compliment the expertise of the lawyer.
After the introduction of ABS’s, the SRA’s chief executive said the move was the next step to allow legal services to be available to more consumers and small businesses. Then, in 2017, the regulator unveiled plans to go even further which proposed two codes of conduct: one for solicitors and one for firms. These proposals are currently undergoing consultation; but it’s clear that change is coming to the profession.
In light of this, it’s of paramount importance that the public understand the differences between the legal providers currently in the market. Choosing to instruct an unregulated practice does not mean receiving a poor level of service from an unqualified practitioner, but to ensure high quality, consumers should check and make sure that the business they are dealing with use qualified and experienced lawyers, as there is no requirement for this in an unregulated practice.
Regulated Vs. Unregulated: what’s the difference?
Section 12 of the Legal Services Act 2007 sets out the six specific legal services activities that only those who are authorised (or those who are exempt) can carry on. These are called “reserved legal activities” as shown below:
- the exercise of rights of audience (i.e. appearing as an advocate before a court);
- the conduct of litigation (i.e. managing a case through its court processes);
- reserved instrument activities (i.e. dealing with the transfer of land or property under specific legal provisions);
- probate activities (i.e. handling probate matters for clients);
- notarial activities (i.e. work governed by the Public Notaries Act 1801); and
- the administration of oaths (i.e. taking oaths, swearing affidavits etc.)
Reserved matters require specialist attention and intensive legal training, and as a result, can only be practiced by a regulated firm. If the nature of your legal issue falls into one of these categories, only a regulated law firm can provide advice and representation. Regulatory status is gained through obtaining an SRA membership and acquiring Professional Indemnity Insurance. This certainly comes with a price tag so naturally, the costs of instructing a solicitor of a regulated firm will be higher. However, should your matter be particularly complex, high risk or require specialist attention, choosing a regulated solicitor will be worth the extra cost.
An unregulated practice does not require lawyers to register with the SRA, or, in the case of Barristers, comply with the codes of conduct set out by the General Counsel of the Bar of England and Wales; nor to hold professional indemnity insurance. Such practices regulate their own activities under contracts with their clients, as happens with most other professions and businesses. An unregulated firm may not be able to act on reserved matters (as listed above), but if your issue does not fall into one of these categories, instructing a lawyer through an unregulated practice will certainly lower your fees. If it’s an issue that does not require specialist attention, this can be a cost-effective solution.
What makes us different.
360 Law Group is now the only law firm in the UK that can offer ALL legal services on a regulated or unregulated basis, which makes us the first law firm in history to offer you the choice within one group of companies.
We believe that both regulated and unregulated practices have a place in the legal industry; that they can - and do - coexist. So, by operating as a virtual law firm, we are able to deliver our global clients expert legal advice through our regulated practice - 360 Law Services - or our unregulated practice - 360 Business Law.
All of our lawyers are fully qualified with a minimum of 5 years experience post qualifying, which means that you can take advantage of the benefits that come with either option, safe in the knowledge that the quality of advice will be of the same exceptional standard no matter what.
By offering our clients this new choice, we have the unique position of being the first in the market to set the standard for the coming years. The legal industry is evolving like never before, and it’s up to the pioneers of the profession to devise new, cost-effective solutions that meet the standards of those most crucial to the industry: the consumers and businesses.
Welcome to the future of the legal profession: it starts with a choice.