25 June 2013

Regulator widens criteria for entity approval

It will be easier for barristers to set up legal businesses after the Bar Standards Board agreed last week to make the criteria for approving new entities more flexible. 

At its monthly board meeting, the barristers' regulator agreed to recommendations that several compulsory rules now be made discretionary, so as to make the authorisation regime more agile. The rules would have obliged entities to
• have at least one practising barrister who is a manager and owner;
• ensure that every owner is also a manager; and
• conduct only 'legal activities'.

These criteria will still be included in a policy statement, to be published with the new Handbook - due to go live in January 2014. 

Vice-Chair of the Bar Standards Board, Patricia Robertson QC, said: "The legal services profession is rapidly changing. We want to ensure that barristers can adapt to meet consumers' needs in an increasingly competitive and innovative market and that our regulatory procedures respond to a changing market. This is why we took a second look at the rules around entities and replaced some of these with a policy statement. We have also recently changed the rules around public access and, once approved, the new Handbook will allow self-employed barristers to conduct litigation, too. All these moves are designed to empower barristers to broaden their business base to better meet consumers' needs."

Entities are likely to be companies or partnerships and the Legal Services Act 2007 (LSA 2007) requires them to be authorised before they can undertake reserved legal activities. The BSB's initial proposals concern entities that are entirely owned and managed by lawyers.

Alternative Business Structures (ABSs) are entities with some lay ownership or management. The LSA 2007 introduces a separate statutory regime for these entities, which require to be licensed by a 'Licensing Authority'. The BSB will apply to the LSB to be a Licensing Authority once its 'non-ABS' entity regulation regime has been approved.

Barristers can already set up ABSs, but they currently need to be regulated by another approved regulator such as the SRA.  

The BSB also agreed to delay submitting its application for entity regulation until the LSB had reached a decision on the new Handbook, which, if approved, will also be introduced in January 2014.


Notes to editors 

The BSB is currently seeking approval from the LSB for the new Handbook for individual barristers, which is due to be launched in January 2014. A decision on this is expected in July 2013. Once the Handbook has been approved, the BSB will then apply to become a regulator for non-ABS entities. Once this process is complete, the BSB will then be seeking designation as a licensing authority for ABSs. It is anticipated that we will be in a position to start licensing ABSs by the end of 2014.

The new Handbook (Code of Conduct) was formally approved by the Bar Standards Board at a public board meeting in March 2013. Board papers are available on the BSB website.

The Bar Standards Board regulates barristers called to the Bar in England and Wales in the public interest. It is responsible for:
• Setting the education and training requirements for becoming a barrister
• Setting continuing training requirements to ensure that barristers' skills are maintained throughout their careers
• Setting standards of conduct for barristers
• Monitoring the service provided by barristers to assure quality, and handling complaints against barristers and taking disciplinary or other action where appropriate

Contact: the Bar Standards Board Press Office on 02076111392