Choose the right regulator for your conveyancing or probate practice

Article co-written by Scott Thorne of Howden and Claire Richardson of the CLC

Updated from an article previously published in March 2025

Many people running law firms don’t realise they might be able to choose the regulatory regime that offers the best fit for their firm.

It may seem like a novel idea, but it was made possible by the Legal Services Act 2007 and several enterprising firms have already taken that step.

Why would you move your practice from one legal services regulator to another?

Mostly because not all regulators of legal services are the same. For example, the Bar Standards Board (BSB) regulates advocacy services delivered by Barristers, and the Costs Lawyers Standards Board (CLSB) covers those lawyers whose clients are generally other lawyers. Others, such as the Chartered Institute of Legal Executives (CILEx) Regulation and the Solicitors Regulation Authority (SRA) regulate individuals and firms delivering a very wide range of legal services.

Tailored regulation for specialists in conveyancing and probate

The Council for Licensed Conveyancers (CLC) was established to drive innovation and greater choice for consumers of conveyancing services. Later, probate was added to the work that the CLC regulate.

Very importantly, CLC regulation is itself sufficient to access the conveyancing market, and there is no need to meet any additional requirements such as membership of the Law Society’s Conveyancing Quality Scheme (CQS). The CLC’s regulation and the regulated community’s specialisation deliver the confidence and security that clients and lenders expect.

The CLC is an outcomes-focused regulator and the practices it regulates can develop their own ways to deliver conveyancing and probate services that meet the regulatory requirements and develop thriving businesses that respond to their clients’ needs and preferences. As a regulator of specialists, they have a strong focus on the risks that are relevant to those specialisations and can concentrate on managing those, through similarly-focused regulatory work.

Close engagement and clear advice to maintain compliance

The CLC has developed a highly-effective model of regulation, aimed at preventing client harm rather than waiting for it to crystallise and then dealing with the consequences. 

This ‘managed compliance’ approach is tailored to the needs of specialist conveyancers and probate lawyers who are committed to delivering high quality legal advice and client service.

A key aspect of managed compliance is that the CLC maintains close engagement with each practice and provides a nominated contact in the form of a Regulatory Supervision Manager or Officer (RSM/RSO).

Firms can contact their RSM/RSO easily and they answer questions promptly and comprehensively. The CLC aims to provide clear guidance that gives you confidence to move forwards with your plans.

What’s the process for switching regulator?

It begins with a conversation with the CLC’s licensing team who will talk to you about what you want to achieve and explain the checks they will carry out. They will then work with you closely throughout the process to support you in developing your plan.

The CLC will need to be satisfied that you can meet their regulatory standards before they grant you a licence. There is of course an annual licence fee to pay, and you will need to secure professional indemnity insurance (PII) that meets the CLC’s requirements.

There’s much more detail on the CLC website.

The CLC will be very happy to hear from you about moving your conveyancing or probate practice into CLC regulation. Contact [email protected] to start a conversation.

What are the ramifications for your Professional Indemnity Insurance (PII)?

Choosing the right model: Switch vs. Hive-Off

Conveyancing or probate practices transferring regulator may be ‘switching’, which means moving an entire conveyancing and/or probate business from one regulator to another, or ‘hiving-off’ which means taking the conveyancing or probate practice out of a wider business. When considering restructuring your legal practice and choosing between the "Switch" and "Hive-Off" models, early engagement with your broker is absolutely crucial. There's no universal solution, and the best approach depends on your firm's specific circumstances, the type of work you undertake, and your PII arrangements. Navigating these complexities requires expert guidance, and your broker can help you assess the implications of each model for your practice.

It is worth noting that the traditional ‘Hive-Off’ model typically requires the firm to put in place some legal and operational separation between the SRA and CLC firms to comply with the different legal frameworks of each regulator. It’s best to speak with the CLC and your broker to discuss these requirements as they will also need to be taken into consideration when choosing your preferred model   

Hive-Off Model

The ‘Hive-Off’ model often presents a more straightforward transition from a PI perspective.  This is because the past liability of the practice typically remains with the existing regulated entity, or it can be transferred to your new CLC entity. This transfer is generally smoother as the firm's work is exclusively within the CLC's regulatory scope – primarily conveyancing, wills, and probate. However, despite a simpler PII process, entities must still satisfy CLC requirements and secure confirmation from insurers regarding assumption of past liability. 

Switch Model

The "Switch" model can be more complex, especially when the firm has handled legal work outside the CLC's regulation. This is where the PII challenges arise.

 Here's a breakdown of the potential scenarios and issues to consider:

• Transferring all non-regulated work: One option might seem to be to transfer all non-regulated work to the new CLC entity. However, this requires agreement from both the existing and new insurers, as well as the CLC. Securing such a tri-party agreement can be difficult, and will not always be possible to achieve.  Certain insurers will not agree to cover work outside their typical risk profile. The CLC is also hesitant because if the firm does transfer the liability and the insurer who agrees to cover the past liability withdraws from the market, it limits the options available to the firm going forwards.
• Splitting liability: A more common approach involves splitting the liability. The firm transfers the liability for CLC-regulated work to the new CLC entity and negotiates a run-off policy for the remaining work under the previous regulator. This split requires careful negotiation and a clear delineation of responsibilities.  It's crucial to understand what constitutes "run-off" cover and its limitations. 
• Insurer appetite: Crucially, not all insurers are willing to accommodate this split-liability scenario. Some may insist that all previous work, regardless of its regulatory status, falls under the run-off policy with the existing insurer. This can create significant challenges and potentially increase costs.

Should I transfer liability?

There are several factors that you need to consider when deciding whether to transfer the liability to your new CLC entity.

Potential pros of transferring liability

Simplified structure:  In some cases, transferring liability to the new CLC entity can create a cleaner division of responsibilities and potentially simplify the firm's operational structure going forward. This is more likely in the "Hive-Off" model where the work is already exclusively within the CLC's remit.

Clarity of responsibility:  Transferring liability can, in theory, provide greater clarity about which entity is responsible for specific past work. This can be beneficial for risk management and claims handling purposes.

Run-off considerations:  Although transferring liability can help tidy up the firm’s structure and may reduce the need for a separate run‑off policy, it does bring a few practical points to work through with insurers and regulators.

One useful option for firms is to look at insurers who already write on both SRA and CLC terms, or those willing to provide run‑off solely for the areas of work that will not transfer to the CLC when the firm renews its SRA policy. This opens a helpful window for firms to have more confident and constructive discussions with their existing insurer whilst still under SRA regulation, limiting any disruption whilst they investigate their options for transferring to CLC regulation, and giving them assurance that the insurer can either support CLC terms or consider specific run‑off arrangements for work that has ceased or will cease at the point of transfer.

In practice, firms often find that with a little forward planning and the right guidance, these considerations are manageable and support a smooth, well‑prepared transition.

Cons of transferring liability

Complexity: Transferring liability, particularly when dealing with mixed regulatory work, introduces significant complexity. Negotiating with multiple insurers and regulators can be time-consuming and challenging.

Claims: Firms transitioning to a new regulatory body often seek a 'fresh start,' perhaps due to new ownership or a renewed focus on business growth. However, transferring the liability for past work means the firm remains exposed to claims arising from activities conducted while insured under the previous regulator. This can be particularly significant for firms under new ownership, as their PII policy could be called upon to cover claims for work completed before they took ownership. This exposure to pre-acquisition liabilities can impact future premiums, potentially making them more costly.

PII Premiums:  Because the firm continues to carry historic liability, it will often face a similar premium to that paid under SRA regulation.

A ‘Hive-Off’ typically offers a smoother and more straightforward PI transition, particularly for firms undertaking only CLC‑regulated work. A “Switch,” however, can introduce additional considerations, especially where the firm has previously handled work beyond the CLC’s regulatory remit. These added nuances usually arise from the need to transfer liability effectively, obtain insurer agreement, and coordinate any required run-off arrangements.

One way firms can begin preparing for a potential Switch is by selecting an insurer that offers both SRA‑ and CLC‑compliant terms. This can sometimes support discussions around run‑off and may ease the pressure of switching if the insurer is open to considering a transfer of terms at the end - or even mid‑term - of the policy. Both the insurer and the CLC will want assurance that the firm has a strong trading future, supported by robust financials and a sound business position, demonstrating its ongoing commercial strength.

Although transferring liability can help tidy up the firm’s structure and may reduce the need for a separate run‑off policy, it does bring a few practical points to work through with insurers and regulators. It can also mean the firm, especially under new ownership, may still receive occasional queries or claims linked to past work, which could have some influence on future PI premiums. With some thoughtful planning and the right guidance, however, most firms find these matters manageable and are able to navigate the process with confidence.

If you have any questions regarding this article, please get in touch.

This article has been written in conjunction with Claire Richardson of the Council of Licensed Conveyancers (CLC) and the opinions and views stated by her in this article are those of Claire Richardson on behalf of the CLC and not Howden Insurance Brokers Limited (“Howden”). Howden is an insurance broker and is not authorised or regulated to advise on selecting the right regulator for your conveyancing or probate practice. Howden shall not (i) owe or accept any duty, responsibility or liability to you or any other person; and (ii) be liable in respect of any loss, damage or expense caused by your or any other party’s reliance on this article.