If you take even the slightest interest in developments in the legal profession, you’ll probably have noticed the new SRA Rules which allow Solicitors to practice freelance. It’s got a few people wondering whether becoming a Freelance Solicitor is much different to becoming a Consultant Solicitor at a firm like nexa law, and whether there is an advantage over one or the other. In this article, we answer a few of the most common questions.
No! Working as a Consultant Solicitor has been possible since the advent of the Legal Services Act 2007. As a Consultant Solicitor, you work under the umbrella of a fully SRA regulated firm of Solicitors with Solicitors’ Professional Indemnity cover. Colloquially, Consultant Solicitors may have been referred to as Freelance Solicitors, but with regulatory changes made in November 2019, Freelance Solicitors should be considered a distinct type of Solicitor and should not be confused with Consultants. Technically, there is now no such thing as a Freelance Solicitor because the SRA has coined the term “SRA Regulated Independent Solicitors” – but we rather suspect that isn’t going to catch on! So let’s stick with Freelance Solicitor for now!
In terms of day to day working practices there is relatively little difference in how a Freelance Solicitor and a Consultant Solicitor may work. Each will carry out legal work for a client or clients and have the ability to set their own work hours, location and ways of doing things (subject to the demands of their clients, of course!). Each will be regulated by the SRA and have largely similar regulatory obligations, except for a few nuances applicable only to Freelance Solicitors. Whilst Freelancers will be able to carry out reserved activities, they won’t be able to hold client money (though they can outsource this function to an appropriately authorised supplier of third party managed accounts – the availability of which currently appears to be limited). Nor will they be allowed to contract through any sort or corporate legal entity. Whilst Freelancers are required to maintain “adequate and appropriate” insurance cover, there is no requirement for it to meet the minimum terms applicable to Solicitors’ professional indemnity insurance. Consultant Solicitors, on the other hand, operate as self-employed contractors to an SRA regulated legal entity.
First of all, most Consultant Solicitors contract with their regulated firm through a limited company. The Consultant therefore benefits from limited liability should the regulated entity have any claim against the Consultant Solicitor for substandard work, albeit that in almost all cases any acts of omission of the Consultant will be covered by the professional indemnity cover of the regulated firm. Compare this with the position as a Freelance Solicitor where you contract in your personal capacity direct with the client, and your professional indemnity cover may be of unknown provenance. The insurance which Solicitors’ firms carry has a minimum limit of indemnity of £2m and very few valid exclusions. Contrast this with the more generic policies which are likely to be available to Freelancer Solicitors; bearing in mind that very few insurers have expressed an interest in offering policies at all. For an inherently risk-averse profession, the idea of unlimited liability and insurance policies of an unknown quality are unlikely to sit comfortably with many.
Those considering a freelance path should ask themselves why they would put their house on the line for the sake of their clients? For those keen to find out how becoming a Consultant Solicitor at nexa law can help them fulfil their dreams of a more flexible career without the risks associated with going freelance should get in touch with Eliot Hibbert now using email@example.com.