Legal Disciplinary Practices (LDP's) FAQs
1. What is a
The Legal Services Act 2007 ( the 2007 Act) introduces new
methods of practice for lawyers and people working in firms that
supply legal services. An LDP is an example of one type of such a
The 2007 also confers on the Solicitors Regulation
Authority (SRA) the power to regulate LDPs that include up to 25%
non-lawyer managers provided that they have at least one solicitor
or registered European lawyer manager. Secondary legislation
allowing LDPs came into force on 31st March 2009.
The 2007 Act also confers power on the Council for Licensed
Conveyancers (CLC) to regulate bodies that provide conveyancing
services and other restricted legal services, where an authorised
person of a kind qualified to provide such services is a manager,
employee or owner of an interest in the body.
2. What is
Firm-based regulation is regulation of the business entity, as
opposed to the individuals working within it. In order to be
authorised to carry out legal work, both the individual and the
firm must be regulated.
Legal executive sworking in LDPs will be regulated both as part
of the business entity and as individuals. Regulation of LDP
business entities will be carried out by the SRA, and will
essentially deal with the services that the firm provides. This
will necessarily involve a substantial degree of regulation of the
individuals, including legal executives, providing services on
behalf of the entity. However, residual regulation of
individual legal executives will be by CILEx Regulation, the
regulatory arm of CILEx. This will predominantly be concerned
with the core rules of CILEx's Code of Conduct that apply to all
practising legal executives.
It will be possible for the SRA to take action against legal
executive managers or employees of LDPs under its statutory powers.
This could include, where necessary, issuing a fine or public
rebuke to the legal executive. The SRA has the capacity to report
any actions taken against, or intended to be taken against, legal
executives to CILEx Regulation. Following such a report, CILEx
Regulation may take further action against legal executives if it
is appropriate and proportionate to do so.
3. Can I set up an LDP or
is it only solicitors who can do this? Can a partnership consist of
chartered legal executive lawyers only? If so, who will regulate
Chartered Legal Executive lawyers would be able to set up
LDPs (subject to the requirements of question 1 above), along with
solicitors and other people considered appropriate by the SRA. An
LDP would have to notify the SRA of its membership and of other
matters, and the LDP would first have to obtain a certificate of
good standing in respect of lawyer members who are not solicitors
and obtain specific approval of non-lawyer managers.
The 2007 Act makes no provision for a partnership consisting of
only legal executives
4. Are there any restrictions on the type of
work that I may do in an LDP?
Chartered Legal Executive lawyers would be able to undertake the
'reserved activities' that CILEx as a approved
regulator is authorised to regulate under 2007 Act.
Chartered Legal Executive lawyers can also carry out all
activities that they currently undertake by virtue of being
employed in a solicitors firm.
5. Do I need to undertake
solicitors' accounts training if I choose to become a partner in an
LDP? Is there any other training that I need to
During the course of the SRA consultations, it was
emphasised that compliance with the account rules is the
equal responsibility of all partners in a firm. As
such, it may be a responsibility of the firm to ensure
appropriate training and competency levels relating to the
6. Will joining an LDP have any effect on my indemnity
Given that the Chartered Legal Executive lawyer will be acting
as an employee or manager of the LDP, the situation regarding
insurance will be the same as for employed Chartered Legal
Executive lawyers working in solicitors' firms. Chartered Legal
Executive lawyers will therefore be insured under the firm's
insurance. Similarly, they will be covered by the SRA's
compensation fund. However, individual legal executives would be
wise to confirm with the firm in which they are employed or seeking
employment that the insurance arrangements are as set out
7. Would I still be regulated by CILEx Regulation if I
chose to work in an LDP? To what extent will I be regulated by the
CILEx Regulation will remain the primary regulator of legal
executives, although the SRA will have powers of regulation against
legal executives in SRA-regulated LDPs under the Legal Services
Act. Under the Act, the SRA will regulate LDP firms as entities in
themselves, and it will also have powers to regulate individuals
working for the LDP, including Chartered Legal Executive lawyers.
It will be possible, for instance, for the SRA to fine or publicly
rebuke a legal executive where it concludes that a Chartered Legal
Executive lawyer has breached the relevant rules, or to refer a
matter to the Solicitors' Disciplinary Tribunal or CILEx
Regulation. This means that actions taken by the SRA could
potentially include action against individual legal executives
and/or to information being supplied to CILEx Regulation by the SRA
about the conduct of legal executives where it is felt to be
justified, potentially leading to disciplinary actions being taken
by CILEx Regulation. Memoranda of understanding to cover the
criteria and arrangements for the sharing of that information are
currently being developed.
8. To whom should I pay my practising certificate fee if
I join an LDP?
The practising certificate would still need to be paid to CILEx
Regulation, as you would still be a practising Chartered Legal
Executive lawyer. CILEx Regulation will remain the
professional regulator of all legal executives.
9. If there are complaints about me whilst I am working
in an LDP will it be CILEx Regulation or SRA that deals with
Complaints about the firm itself, mainly about the service it
provides, would be dealt with by the SRA as the regulator of the
entity. As explained in 11 above, this could involve investigation
of the conduct of a legal executive and potentially disciplinary
action by the SRA. Complaints about the legal executive as an
individual, particularly about conduct not covered by the SRA
rules, and all serious complaints which might lead to suspension or
disbarment, would be covered by CILEx Regulation as the individual
regulator of the legal executive. These arrangements will be
covered by the memoranda of understanding referred to in the answer
to question 11.
10. Will CILEx Regulation become a regulator of
There is no provision in the 2007 Act to allow CILEx's
regulatory arm to become a regulator of LDPs. However,
see below for other forms of practices.
11. I have also heard mention of multi-disciplinary
practices and Alternative Business Structures. What are they and
will legal executives be able to work in them?
Multi-disciplinary practices (MDPs) are partnerships involving
lawyers and other professionals such as accountants or architects.
These will involve the provision of legal and other services.
Alternative Business Structures (ABSs) will allow lawyers to form
multi-disciplinary practices with non-lawyers, permitting them to
offer legal as well as non-legal services. Under the full ABS
regime non-lawyers, including commercial organisations, will be
allowed to own firms that provide legal services. It is anticipated
that these will be the last of the new business structures to be
implemented, around 2011 or 2012.
The opportunity exists for these new business structures to be
regulated by the approved regulators, which could enable CILEx
Regulation to regulate MDPs and ABSs. Again CILEx will need to
decide whether or not to seek the powers which CILEx Regulation
would need to regulate such entities.
12. What role will the Legal Services Board play in the
regulation of the legal profession?
The Legal Services Board will oversee the role of regulators in
providing legal services. It will not directly regulate firms, but
will ensure that regulation is carried out properly by the approved
The Chair, Chief Executive and Board of the LSB have now been
appointed. More information on how the LSB will operate will be
provided in due course.