Table of Contents
Introduction
Ever thought of branching out on your own? We’ve had loads of questions recently from solicitors - consultants and employed - who’ve had their interest peaked by the freelance option introduced by the SRA in 2019.
According to Paul Philip, chief executive of the SRA, the idea behind the new freelance option was to: “remove unnecessary regulatory burdens and allow solicitors to be more agile and adaptable in how they work day-to-day”.
But for most, quite frankly, they don’t have the time to invest to look into the options and what they’d need to do to set themselves up. It’s not something they want to rush, particularly having built up a reputation across their career that they could damage by rushing things. Perhaps that’s you too?
Well, fear not - we’ve done the leg work for you and summarised all of the important steps and answers to the key questions below. If there’s anything else you need to know, reach out and ask! We love a curious solicitor here at Lawhive.
Who Can Become A Freelance Solicitor?
We love the freelance route, as it’s so much quicker to set up on your own. As long as you’ve got a practising certificate, you could be up and running as a freelancer within the week.
In terms of PQE, you’ll need to have at least three years behind you if you want to carry out reserved legal activities, but for non-reserved work, there is no minimum requirement.
Key Steps
Register With the SRA
The first step is to simply let the SRA know that you want to start trading as a freelance solicitor. You can do this by submitting a form here.
Your SRA record will be updated so that clients and other professionals can see your new trading status. Providing you have a practising certificate without any conditions attached, you’ll be approved, usually in a few days.
Arrange Insurance
You may be surprised to read that the SRA does not require freelance solicitors to get indemnity insurance (PII) if they are carrying out non-reserved work. Even so, you might want to think about a policy to protect yourself against any future claims.
If your work is classed as a reserved activity, then you’ll need to get “adequate and appropriate” indemnity insurance to satisfy the SRA. It’s also worth letting the insurer know if you plan on seeing clients in your home office, or work from home regularly.
Sort Your Compliance Documents
Once you’ve got your PII and registered with the SRA, there’s just a few things to think about from a compliance point of view:
AML Checks: Make sure you’ve got a risk assessment policy and procedure for verifying your client’s identity. Consider joining our platform to save time on this step - we carry out AML & KYC checks on all clients we send over.
Transparency Rules: Either on your website, or in your marketing materials, you should make sure you publish cost information and details of your complaints procedure, especially if you’re doing reserved work.
Data Protection: Register with the ICO to confirm that you will store client data securely.
Business Address: You’ll need a practising address in the UK that you’re comfortable sharing with clients.
Client care letters should also flag your new status for clients and let them know if their indemnity protection is limited as a result.
Limitations
Although the potential upside is huge, there are some limiting factors you ought to be aware of before you register as a freelancer:
Client Funds: You’re not allowed to hold client money as a freelance solicitor and can only take funds for your legal fees and disbursements. This is obviously more of a problem for some practice areas, but many freelancer solicitors get around this by using Third Party Managed Accounts (TPMAs). You’ll need to let the SRA know if you’re going to go down this route though.
Undertakings: Especially if you are using a TPMA, the undertakings that you use in your day-to-day work may need a rewrite.
Employing Others: If you’re working in a reserved practice area, you won’t be able to employ anyone to help you in the business, e.g. secretary or paralegal. You will also need to trade through your own name, not via a Ltd company or LLP for reserved work.
Frequent Questions
Do I need run-off cover?
You don’t need to purchase run-off cover as a freelance solicitor to satisfy the SRA, even if you are doing reserved work. Again, you may want to make a personal choice to put some cover in place until any risk of claims has passed. You’ll want to take statutory limitation periods for negligence claims into account, and also your practice area, as some tend to lend themselves more to late-arising claims (e.g. conveyancing).
How will I store files in a way that maintains confidentiality and allows access to the files, particularly if I don’t have office premises?
Lots of law firms already use cloud-based technology to securely store client data. There is no need to retain paper-based copies of information, as long as you make sure you can comply with the Code of Conduct. Especially the client confidentiality and data protection sections.
This is something we take really seriously at Lawhive. Our client information is protected by the same level of encryption that banks use, and this includes messages or files sent through the platform. In fact, sharing data through Lawhive is more secure than via email.
Do I need a CRM system?
This is totally a personal choice and you certainly don’t need a CRM system to have a thriving freelance business. There are lots of options on the market for both cloud-based and server-based solutions. Most cloud-based systems offer subscription models that run on a month-to-month basis and are based on the number of users, so can be fairly cost-effective for freelancers.
At Lawhive, we handle acquiring clients, collecting compliance information, invoicing, payments, and customer support. Our online platform and customer success team lets you focus on what you do best.
If you’re a solicitor looking to grow your business and are considering your next step, get in touch and let’s explore whether we can partner together.