A practical guide to applying for an ABS (Alternative Business Structure) licence through the Solicitors Regulation Authority (SRA)

1. How to apply
for an ABS
licence

2. What is licensable?
The Legal Services Act 2007 allows you to:
• Take on external investment
• Offer innovative products and make the most of cross selling services
• Include non-lawyers as part of the management team
• Enter into joint ventures with referrers
• Make comprehensive succession plans
• Implement the most tax effective business structure
You will need at least:
• One Solicitor who is ‘qualified to supervise’
• One non-lawyer involved as a manager or owner

3. Recent examples
• Estate planning company
• HR Consultancy
• Existing law firms
• Quantity surveyors
• Dental brokers
• Law schools
• CMCs

4. Themes
• Planning for succession
• In response to regulatory change
• Needing regulation
• Cross-selling to existing client base
• Joint ventures
• Gap in the market
• Niche or industry expertise

5. Your first three questions
1. What are you trying to achieve?
2. Is ABS the right option for you?
3. What are your risks?

6. Your starting point
1. Business plan
2. Financial projections
3. Set up the entity and structure
4. PI Insurance quote
5. People

7. The Application itself
You must include:
• Main application form (FA1)
• Individual/company application forms (FA2 and FA3)
• Structure chart
• Business plan and financial projections
• Constitution documents
• PII quote
• Evidence of external funding
• ‘Certificate of good standing’ from other regulators

8. Additional documents
• Index to the application bundle
• Continuation Sheet
• Additional financial information
• Companies House documents
• Publicity material
• CVs
• Retainer documents
• Index to office procedure manual
• Any other docs, e.g. info regarding CCJ

9. What happens next
• Submit the application by email
• Triage by authorisation team
• Allocated to a case handler
• Background checks
• Risk letter
• Invoice
• Decision
• Insurance certificate
• Start date

10. Top Tips
• Time spent on preparation is well-spent
• (But don’t agonise over the finer detail)
• Help your Authorisation Officer
• Pick up the phone
• Send a complete application
• Legal Services Act – regulatory objectives
• Risk management
• Evidence everything
• Answer questions and engage properly
• Take a ‘cards on the table’ approach

11. Common hurdles
• Structure / ownership not fully decided
• Failing to keep it simple
• PII
• The forms and missing data
• Atlantic Data checks
• Past issues with owners and managers
• Firm or individual compliance issues

12. Innovation
• SRA Innovate
• Waivers
• Reform

13. Timescales
1. Preparation
2. Drafting
3. SRA approval
SRA fees
• Application fee £2000; and
• £150 for each individual
and/or company that needs
to be authorised

14. COLP-Help…Compliance outsourcing
Unique 5-step model
1. Initial audit
2. Remedial action
3. Regular on-going monitoring
4. Audit trial
5. Expert advice and support
Benefits:
Save the COLP 5-10 hours per month of non-chargeable time
Reduce the risk of unwelcome SRA attention
Maintain the firm’s quality output
Peace of mind

15. Talk to us
Stand L564
info@jonathonbray.com
www.jonathonbray.com
@Jonathon_Bray