Risk alert: taking on roles outside your practice as a solicitor

Insight

Published

18 February 2022

Are you on the Board of Governors at your local school? Or appointed as a trustee of a local charity in your personal capacity as opposed to your role as a solicitor? Do friends ask for “a bit of advice” during an evening out for dinner?

Your knowledge and skills as a solicitor can be invaluable on a school board or where you are involved with a local charity. They can also make you very popular with a friend in need.

But what is your position in these scenarios? Is there clarity about the capacity in which you are giving the advice or opinion? Do others assume that the advice is being given within the scope of the SRA’s regulation and oversight and subject to professional indemnity insurance cover?

It is important to consider and understand the regulatory implications of engaging in roles outside your regular work as a practising solicitor, and the potential for incurring personal liability.

It is a matter of being alert to the point at which the line should be drawn. For example, offering general views and opinions as a school governor is likely to be low risk and part of your role. But if you are called on for specific legal advice, take care. Are you now crossing the line with the result that your conduct would be viewed as “practising as a solicitor”? Depending on the circumstances you could even unwittingly create an implied retainer or assumption of responsibility as between the Board of Governors and your firm.

The Law Society has a very helpful Practice Note highlighting the potential legal issues around taking on additional roles outside practice as a solicitor.[1] It focuses on regulatory compliance and risk management issues that are relevant in the scenarios described above. We recommend that you put the Practice Note on the reading list for all your fee earners.

What is the regulatory position?

The SRA’s primary focus is consumer protection for the clients of practising solicitors and authorised bodies. Issues arising out of personal matters or situations in which an individual is not practising as a solicitor are not its primary concern.  However, it will investigate matters if it considers it is in the public interest to do so. It is therefore important to be mindful of your obligations under the SRA Principles when acting in a role or providing assistance or services outside your professional practice.

The position is well outlined in the SRA’s enforcement strategy which notes as follows:

 

[1] https://www.lawsociety.org.uk/topics/regulation/providing-services-and-taking-on-roles-outside-your-practice-as-a-solicitor

Our key role is to act on wrongdoing which relates to an individual or a firm's legal practice. We will not get involved in complaints against a solicitor which relate solely to, for example, their competence as a school governor or their involvement in a neighbour dispute. However, our Principles [2] set out the core ethical values we require of all those we regulate and apply at all times and in all contexts – and apply both in and outside of practice (as the context permits). We are concerned with the impact of conduct outside of legal practice including in the private lives of those we regulate if this touches on risk to the delivery of safe legal services in future11. The closer any behaviour is to professional activities, or a reflection of how a solicitor might behave in a professional context, the more seriously we are likely to view it. For example, an allegation of financial impropriety against a solicitor when acting as a Member of Parliament, will raise a question as to their fitness to manage client funds. However, we will also be interested in matters that are so serious that they are capable of damaging public confidence, such as dishonest or discriminatory conduct in any context.”

Always ensure there is certainty about the capacity in which you are working and be aware if your activities cross the line to a point where you would be considered to be “practising as a solicitor”, which would trigger regulation by the Solicitors Regulation Authority (SRA) in relation to the role you are undertaking.

Identifying when you would be considered to be “practising as a solicitor”

The Practice Note includes a flow chart to help determine whether you are “practising as a solicitor” when undertaking an outside role. Some situations will be clear-cut, but there will inevitably be others that fall into a grey area.

One example given is that of a school website that includes a biography of its school governors, including reference to an individual being qualified as a solicitor. This alone does not mean that the individual is “practising as a solicitor”.  But SRA Principles will still apply and the guidance above relating to the SRA’s enforcement strategy will be relevant.

If you do cross the line and are found to be practising as a solicitor, all the SRA Standards and Regulations will potentially apply. If that is the case then in addition to complying with the rules and codes relating to your behaviour and conduct, you will also need to comply with the regulations relating to your authorisation and framework of practice. This will include any requirements to hold a practising certificate and to have professional indemnity insurance.

What about PII?

The potential for claims to be made is an important issue to consider when deciding to take on a particular role.

Even if you are not providing your services as a solicitor, you may nevertheless be liable for any acts or omissions for which you are responsible. You will not be covered by the firm’s PII in this scenario (unless a specific endorsement has been agreed by PII insurers). Always check whether the entity you are engaging with carries any insurance and what the terms and scope of the cover is.

Be aware that if you cross the line and are deemed to be “practising as a solicitor”, the SRA Standards and Regulations might require that you have PII. This would arise if, for example, you were found to be “practising as a solicitor” because you are carrying out reserved legal activities as a freelance solicitor for friends or family members. In this scenario your law firm’s PII will not provide cover because you are considered to be working as a freelancer as opposed to undertaking the work from within the framework of the firm.

However a firm’s PII cover could be called upon if an individual is considered to have been “practising as a solicitor” in an outside role and has acted in such a way as to create an implied retainer with or assumption of responsibility by the law firm where he or she practises. This could happen where, for example, legal advice is sent to the individual’s fellow School Governors on the firm’s letterhead.

Action and checklist

Offering services outside your practice as a solicitor can be a rewarding experience, and those who volunteer their time for the benefit of the community are to be applauded. Usually these activities are low risk and problems rarely arise. But things can go wrong, and if they do the fallout can be considerable. Reputations of both firms and individuals can be impacted and a great deal of time and expense can be involved in resolving matters.

We therefore encourage firms to use this article as an opportunity to highlight the issue with fee earners. After reviewing the Law Society Practice Note, one-to one meetings could be used as a forum to discuss any roles that individuals are currently engaged in, or any concerns they have. This will also give the firm an opportunity to assess if there are any  specific or potential risk issues they need to address.

We also offer the following checklist for those of you who are contemplating roles or offering services outside your practice as a solicitor:

  • Understand the expectations of the parties you are engaging with
  • Consider the extent to which you may be personally exposed
  • Find out whether the entity has any insurance cover in place and what the scope of this is.
  • Specify the capacity in which you give your advice or opinions
  • Ensure parties you are engaging with clearly understand whether they have protections from a regulatory and redress perspective.
  • Be alert to actual or potential conflicts of interest that might arise
  • Make appropriate disclosures, exclusions and reservations
  • Always take the opportunity to stop, think and reflect if you are asked for a view or advice that might change the basis upon which you are engaging
  • In any case of doubt, consider taking legal or regulatory advice on your individual position.

[2] https://www.lawsociety.org.uk/topics/regulation/providing-services-and-taking-on-roles-outside-your-practice-as-a-solicitor

Jenny Screech

Written by Jenny Screech LLB (Hons)

Legal Consultant, Howden PII