Important Law Update - The Legal Services Act 2007
The Legal Services Act 2007 - A Quick Summary
On Thursday 6th October 2011, the Legal Services Act 2007 finally came into force. This Act will have a significant impact on legal firms' business activities. Below you can find a brief summary and a more comprehensive 5-part guide to the new legislation, put together by Mitchell Charlesworth's legal accounting experts.
This new law prescribes several key changes to the legal profession:
1. It will de-regulate the provision of legal work, such that companies who do not offer legal services as their primary business can now undertake legal practice. This has also been called 'Tesco-law' because technically supermarkets would now be able to offer legal services and purchasing legal services will now become as simple as shopping for everyday items.
2. There are significant changes to the rules concerning Incorporation and Alternative Business Structures. For the first time, anyone can own a legal firm, even if they do not have a legal background. This opens up the possibility for private equity backing flotation on the stock market.
3. As a result of the changes to the Alternative Business Structures regulations, law firms can also add non-legal activities to their practice and become a 'one-stop shop' for professional services.
4. New Solicitors' Accounts rules are published by the Solicitors' Regulation Authority (SRA) which will have a major effect on your accounting function. The principal purpose of these new accounting rules is to protect clients' money that law firms might be holding on their behalf.
5. The SRA has stated that every legal firm must appoint a COLP (Compliance Officer for Legal Practice) and a COFA (Compliance Officer for Finance and Administration) under the new Act.
For more information, our legal experts have put together a comprehensive 5-part guide to the Legal Services Act:
Part 1: What the Legal Services Act 2007 means for you
Part 2: What you should do NOW
Part 3: The COLP and COFA requirements
Part 4: The new Solicitors' Accounts Rules
Part 5: How Mitchell Charlesworth can help your law firm
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