The main difference is that law firms are regulated by the Solicitors Regulation Authority. Legal consultancies are not.
Law firms are made up of solicitors who are authorised and regulated by the Solicitors Regulation Authority. When we provide services to our business clients, our lawyers are not doing so in their capacity as regulated solicitors that are authorised by the SRA.
But don't you need to be regulated to do what you do?
Not for the type of law that we practise.
In the UK, there are certain activities which are “reserved” to solicitors. These are:
- the exercise of a right of audience (i.e. the right to act as an advocate in court);
- the conduct of litigation;
- probate activities;
- notarising; and
- the administration of oaths.
We do not conduct any of these reserved activities. We provide legal advice in non-contentious commercial, intellectual property and IT matters, which is not an activity reserved to solicitors. Before joining The Law Boutique, this is what each of our consultants did for a living as solicitors or barristers. Now, as legal consultants, we conduct the same activity, using the same skills and knowledge, but without being authorised or regulated as solicitors or as a law firm.
Do you have professional indemnity?
Yes, we have professional indemnity cover of £2,000,000 per claim. We also have public liability cover of £5,000,000 per claim. If we are advising you in relation to a particularly high-value or high-risk transaction, then we are more than happy to discuss increasing our professional indemnity cover as necessary.
What else do I need to know?
From a client’s perspective, using an unregulated consultancy as opposed to a firm of solicitors will save costs without compromising on quality. While our view is that the cost benefit to the client outweighs the downsides of using a legal consultancy, we want our clients to be fully informed of the position to make up their own minds. Here are the key distinctions:
Insurance: Solicitors are required to maintain mandatory levels of professional indemnity insurance cover (at least £2,000,000 per claim). The Law Boutique also maintains professional indemnity cover of £2,000,000 per claim.
SRA Code of Conduct: Solicitors are subject to rules issued by the Solicitors Regulation Authority relating to the conduct of their business and in particular imposing ethical standards and a duty to act in the client’s best interests. We are not subject to those rules. Having said that, this makes very little difference to the client, as it is clearly in our best interests to act honestly whether or not we are subject to written rules requiring us to do so. Also, the existence of the SRA rules does not necessarily prevent rogue solicitors from acting in breach of those rules.
Complaints procedure: If you’re unhappy with the service received from a solicitor, you can raise a complaint with the Legal Ombudsman. If you’re unhappy with our service, then you cannot complain to the Legal Ombudsman but will have to raise your complaint with us directly. This has never happened before.
"Privileged" advice: Solicitors’ advice can be “privileged”. What this means is that correspondence between a client and solicitor can, if made confidentially and for the purposes of legal advice, be withheld from a court or third party in connection with legal proceedings. Advice from non-regulated advisors is not “privileged”, which means that our advice may be disclosable in evidence in the context of a legal claim. In this sense, our advice is treated in the same manner as advice from your accountants, management consultants, HR consultants or anyone else who is not a regulated legal advisor such as a solicitor or barrister. However, because we do not advise on contentious matters our view is that our correspondence with our clients does not need to be “privileged”.