Freelance Solicitors – The ‘Wild West’?

Dilara Devin explores the impact of freelance solicitors on the legal sector this year.

From the end of November 2019 onwards solicitors have been able to give legal advice on a freelance basis – self-employed, not linked to an LLP or any other company, trading in their own name. The Solicitors Regulation Authority (SRA) are referring to these solicitors as ‘SRA-regulated independent solicitors’.

The Introduction of Freelance Solicitors

One of the first freelance solicitors began practicing under her own name from March 2020 onwards. She states that this has given her more freedom to work flexibly, especially as a mother of three and be able to charge clients less for her services than an average law firm since she does not have the same overheads.

The introduction of freelance solicitors was viewed as a controversial proposal, especially by the Law Society which has referred to freelance solicitors as the ‘Wild West’ model. Some concerns included the potential lack of consumer protection, in turn, threatening the public’s loss of trust and confidence in the legal profession.

However, it has also been argued that this model provides the potential to broaden diversity in the legal profession by giving solicitors from non-traditional backgrounds the freedom to build their own careers.

Freelance Solicitors in the ‘Wild West’

This relatively new regulation, Regulation 10.2 of the SRA Authorisation of Individuals Regulations, envisaged two types of freelancers: those who provide non-reserved legal services and those who provide reserved legal services. Those providing reserved legal services are regulated via stricter restrictions. For example, these types of freelance solicitors must have at least 3 years post-qualification experience in practice and they cannot employ anyone in connection with the services they are providing. Additionally, these solicitors will need to maintain indemnity insurance with ‘adequate and appropriate cover’- this will need to take various factors such as the nature of the work, client profile and potential liability into account. Either way, this will be far less expensive than insurance law firms take out, as they have to meet the SRA’s Minimum Terms and Conditions. Meanwhile, freelance solicitors providing non-reserved legal services will not need to take out any insurance cover.

Significantly, freelance solicitors cannot hold client funds or use a client account. Instead a third-party managed account may be used. Other solicitors working with freelance solicitors will also not be able to send clients’ money to them.

Furthermore, freelance solicitors are responsible for informing their clients about regulatory safeguards. For instance, where relevant, clients must be informed that they will not be eligible to apply for a grant from the SRA Compensation Fund.

The idea behind this legal service model is to address the unmet legal needs of consumers and small business owners, who find traditional legal advice too expensive to access. Interestingly, this may provide competition to the direct access bar. Currently, direct access work makes up 25% of income at the bar. However, direct access barristers have far more limitations such as the fact that they cannot conduct litigation without authorisation, issue or serve proceedings nor instruct an expert witness. In comparison, freelance solicitors have fewer restrictions in this regard. Moreover, solicitors have more direct and regular client contact than direct access barristers, which may give them a competitive edge.

~ Dilara Devin, The Student Lawyer