Introduction to legal services and regulation - Role of the Solicitors Regulation Authority (SRA)

Learning Outcomes

After studying this article, you will be able to explain the regulatory structure for legal services in England and Wales, describe the role and powers of the Solicitors Regulation Authority (SRA), identify the SRA Principles and Code of Conduct, and apply key regulatory requirements to practical scenarios. You will also understand how the SRA enforces compliance and manages risks in legal practice.

SQE1 Syllabus

For SQE1, you are required to understand the regulation of legal services and the specific role of the SRA. In your revision, focus on:

  • the regulatory structure for legal services in England and Wales
  • the concept and scope of reserved legal activities
  • the SRA’s function as an approved regulator
  • the SRA Principles and Code of Conduct
  • enforcement and compliance mechanisms used by the SRA
  • the importance of professional standards and risk-based regulation.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. What are reserved legal activities, and who can carry them out?
  2. Name three of the SRA Principles and explain their significance.
  3. What enforcement powers does the SRA have if a solicitor breaches the Code of Conduct?
  4. True or false? The SRA regulates all legal service providers in England and Wales.

Introduction

The regulation of legal services in England and Wales is designed to protect the public, maintain professional standards, and ensure the proper administration of justice. The Solicitors Regulation Authority (SRA) is the main regulatory body for solicitors and law firms, operating under statutory powers to set, monitor, and enforce standards of conduct. Understanding the SRA’s role, its regulatory framework, and the principles it enforces is essential for all SQE1 candidates.

The Regulatory Structure for Legal Services

Legal services in England and Wales are regulated through a combination of statutory requirements and professional rules. The Legal Services Act 2007 established a framework based on two key concepts:

  • Certain legal activities—called reserved legal activities—can only be carried out by authorised persons.
  • All legal services provided by solicitors and regulated law firms are subject to professional regulation, even if the activity is not reserved.

Key Term: reserved legal activities
Reserved legal activities are specific legal tasks (such as litigation, advocacy, conveyancing, probate, notarial acts, and administering oaths) that only authorised persons may perform.

Key Term: authorised person
An authorised person is an individual or entity permitted by an approved regulator (such as the SRA) to carry out reserved legal activities.

The Legal Services Board (LSB) oversees the system and ensures that approved regulators, including the SRA, meet statutory objectives such as protecting the public interest, supporting the rule of law, and maintaining high professional standards.

The Role of the SRA

The SRA is the independent regulatory arm of the Law Society. Its main functions include:

  • authorising solicitors and law firms to provide legal services
  • setting and enforcing standards of conduct and competence
  • monitoring compliance with regulatory requirements
  • investigating breaches and taking enforcement action where necessary.

The SRA regulates solicitors, registered European lawyers, registered foreign lawyers, and SRA-authorised law firms. It also regulates alternative business structures (ABSs) that provide legal services.

Key Term: alternative business structure (ABS)
An ABS is a law firm that allows non-lawyers to own, manage, or invest in the business, subject to SRA regulation.

The SRA Principles and Code of Conduct

The SRA Principles are the core ethical standards that all solicitors and regulated firms must follow. There are seven Principles:

  1. Act in a way that upholds the rule of law and the proper administration of justice.
  2. Act in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.
  3. Act with independence.
  4. Act with honesty.
  5. Act with integrity.
  6. Act in a way that encourages equality, diversity, and inclusion.
  7. Act in the best interests of each client.

Key Term: SRA Principles
The SRA Principles are the fundamental ethical rules that underpin all professional conduct for solicitors and regulated law firms.

The SRA Code of Conduct sets out detailed rules and outcomes for solicitors and firms, covering areas such as client care, confidentiality, conflicts of interest, financial management, and dealings with regulators.

Key Term: Code of Conduct
The SRA Code of Conduct is the set of binding rules and outcomes that solicitors and regulated firms must follow in all aspects of legal practice.

Enforcement and Compliance

The SRA uses a range of mechanisms to ensure compliance and enforce its rules:

  • Risk-based regulation: The SRA focuses its resources on areas of greatest risk to the public or the profession.
  • Proactive supervision: The SRA monitors firms through visits, reviews, and data collection.
  • Reporting requirements: Solicitors and firms must report serious breaches or misconduct promptly.
  • Investigative powers: The SRA can require documents, explanations, and interviews to investigate suspected breaches.
  • Disciplinary action: The SRA can issue warnings, impose fines, restrict or suspend practising certificates, or refer cases to the Solicitors Disciplinary Tribunal (SDT).
  • Intervention: In serious cases, the SRA can close a firm and take control of client money and files to protect clients.

Key Term: intervention
Intervention is the SRA’s power to close a law firm and take control of its client money and files to protect the public.

Key Term: Solicitors Disciplinary Tribunal (SDT)
The SDT is an independent tribunal that hears serious cases of professional misconduct by solicitors and can impose sanctions including striking off.

Risk-Based Regulation

The SRA adopts a risk-based approach, prioritising its resources according to the likelihood and impact of risks to the regulatory objectives. This means that firms and individuals are expected to have systems in place to identify, monitor, and manage risks to compliance.

Key Term: risk-based regulation
Risk-based regulation means focusing regulatory attention and resources on the areas of greatest risk to the public, clients, or the legal system.

Professional Standards and Client Protection

The SRA’s regulatory framework is designed to ensure that solicitors:

  • act with honesty and integrity
  • maintain independence and avoid conflicts of interest
  • safeguard client money and assets
  • provide competent and timely service
  • treat clients and others fairly and without discrimination
  • cooperate with regulators and ombudsmen.

Firms must have effective systems for managing client money, handling complaints, and ensuring all staff are trained and supervised appropriately.

Worked Example 1.1

A solicitor is instructed by two clients on opposite sides of a commercial transaction. What must the solicitor do to comply with SRA rules?

Answer: The solicitor must check for a conflict of interest. If there is a conflict or a significant risk of one, the solicitor must not act for both clients unless a specific exception applies and all conditions (including informed consent and safeguards) are met. Otherwise, the solicitor must decline to act for one or both clients.

Worked Example 1.2

A law firm receives £50,000 from a client for a property purchase, but the transaction falls through. What are the firm's obligations under the SRA Accounts Rules?

Answer: The firm must keep the client money separate from its own funds, maintain accurate records, and return the unused funds to the client promptly. Failure to do so may result in disciplinary action.

Worked Example 1.3

A client complains that their solicitor has overcharged and failed to communicate properly. What must the firm do under SRA rules?

Answer: The firm must acknowledge and investigate the complaint promptly, provide a clear response, and inform the client of their right to escalate the complaint to the Legal Ombudsman if not satisfied.

Enforcement Actions and Sanctions

If a solicitor or firm breaches the SRA Principles or Code of Conduct, the SRA can:

  • issue a warning or rebuke
  • impose a financial penalty
  • place conditions on a practising certificate or firm authorisation
  • suspend or revoke authorisation
  • refer the matter to the SDT for more serious cases, where sanctions can include suspension or striking off.

The SRA also has powers to intervene in a firm to protect clients and the public.

Exam Warning

The SRA does not regulate all legal service providers. Only solicitors, SRA-authorised law firms, and certain other regulated professionals fall under its jurisdiction. Unregulated providers may offer some legal services (such as will writing) without SRA oversight.

Key Point Checklist

This article has covered the following key knowledge points:

  • The SRA is the main regulator for solicitors and SRA-authorised law firms in England and Wales.
  • Only authorised persons may carry out reserved legal activities.
  • The SRA Principles set out the core ethical standards for solicitors and firms.
  • The SRA Code of Conduct provides detailed rules for professional behaviour.
  • The SRA enforces compliance through risk-based regulation, supervision, investigation, and disciplinary action.
  • Firms must have systems to manage risks, safeguard client money, and handle complaints.
  • Breaches of SRA rules can result in sanctions, including fines, suspension, or striking off.

Key Terms and Concepts

  • reserved legal activities
  • authorised person
  • alternative business structure (ABS)
  • SRA Principles
  • Code of Conduct
  • intervention
  • Solicitors Disciplinary Tribunal (SDT)
  • risk-based regulation
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Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

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Senior Associate at Trilegal