CILEx Authorised Entities
CILEx Authorised Entities:
a career opportunity ahead
Catherine Baksi describes how CILEx Regulation can help you run your own business providing reserved legal activities.
About the author
Catherine Baksi is a freelance legal journalist.
A Fellow, a CILEx Practitioner, a solicitor – in one firm; their firm regulated by CILEx Regulation. This is the realisation, for many, that there is a choice in who they approach to regulate their new firm, and that this provides CILEx members with further opportunities on their career path.
Since 2015, it has been possible for CILEx members, having gained practice rights, to own and run their own businesses providing reserved legal activities. This has also meant that, for the first time, other lawyers have a choice of who can regulate their firm: solicitors could opt for their firm to be regulated by CILEx Regulation instead of the Solicitors Regulation Authority (SRA). Two years down the line, eight businesses have been set up and are regulated by CILEx Regulation, and these include businesses run by and with solicitors.
For David Pope, entity authorisation and client protection manager, the key challenge is increasing the awareness of this opportunity to both CILEx members and other members of the legal profession. ‘For CILEx members, gaining the right to offer reserved activities independently was something brand new, so we did not have a pool of applicants on day one. The work that CILEx is now doing in communicating these opportunities to members is vitally important.’
However, he now believes that having talked to members at CILEx events such as Graduation Day, awareness is slowly starting to grow of the career opportunity this provides and how members might set up their own firms, and how they can involve other legal professionals in that firm.
‘I have spoken to a number of members who have set up firms with solicitors regulated by the SRA, who then said “If only I had known”.’
With a background in supporting businesses to get off the ground and grow, David is clear how CILEx and CILEx Regulation look to differentiate what they offer by way of support.
‘Let’s be clear, it’s about setting up a business: it’s not a question of do you want to run your own law firm, but do you want to run your own business? And more people are saying 'Yes'.'
Some members, he says, apply simply because they want to run their own business and because they have seen a commercial opportunity. Others are looking for more control, want to work for themselves and to achieve a better work/life balance.
As you would expect, help and assistance can be found on both the CILEx and CILEx Regulation websites. Anyone considering setting up a firm, he says, should talk to CILEx first and discuss what they want to do and how they could go about it.
‘As the regulator, our role is to assess applications and maintain standards. That allows CILEx to provide the support and guidance an applicant needs. There may be areas in which additional training is required, or qualifications you need to help deliver the legal services that you want to provide. CILEx and CILEx Law School will be able to help with this.’
However, it is important that you do your preparation work at the outset. It may not seem like it, but this is when you will have time to stop and think.
The application process, says David, is ‘thorough and rigorous’, and ensures that applicants are competent to deliver legal services and are not likely to put their clients or the public at risk.
Offering reassurance, he says: ‘We want to make sure everything is set up and in place for businesses to deliver legal services on the day they first open the door. For a lot of people, it’s big step, but hugely fulfilling when they receive that certificate of authorisation for their firm.’
The first thing to think about, he suggests, is the answers to the following questions:
- What services will I be offering?
- Where is my market?
- Who are my clients?
- Why I am I doing it?
The answers can then be turned into your business plan, one of the documents supporting your application, which should describe the business, its objectives and strategies, the market it is in and its financial forecasts.
‘Many people think they need to produce a very lengthy document, but we advise people to try to put down their key points succinctly on one side of A4 paper,’ says David.
The other key area, at the outset, is thinking about how you will demonstrate the skills needed to be a Compliance Manager. Members may not have learnt the practice management and accounting skills that other professionals may acquire during their training, so this may require learning new skills, says David.
‘What we are looking for is how you can combine theoretical knowledge with practical application. Again, we recommend talking to CILEx about what experience you have, what courses and training you have received, and how they can help.’
Those seeking to set up their own business need to submit a completed application form, together with the supporting documents and relevant fee. Prospective entities must demonstrate, to the regulator, that they have all the policies and procedures in place to ensure that they provide a good service to clients. However, what is required will be proportionate to the firm’s size and activities.
Sensible tips include advising firms to provide a 13-month budget to ensure that all regulatory and other costs are covered through to the following year’s renewal.
David reiterated: ‘Everything we ask applicants to provide is to help ensure that they have appropriate arrangements in place, from day one, and can get on with providing a service, earning money, and making their business a success. We are here to help them, and will test their knowledge and skills in a supportive manner.’
‘How long is a piece of string,’ is David’s initial reply. But he continues: ‘Once applicants have acquired the relevant practice rights and provided us with all the information that we require, we will authorise them within a month, even within two weeks.’ Why choose CILEx Regulation? In the regulatory world, why should people opt for CILEx Regulation rather than the SRA?
‘While we are not necessarily cheaper that the SRA, which regulates over 10,000 firms, we are good for people who want to set up a business’, answers David, adding that while research indicates that professionals naturally gravitate to their own regulator, the sector is now starting to see more movement.
’We are confident from the feedback we have received that we really support our applicants through the application process, and once they are up and running.’
The regulatory model, David explained, is risk-based rather than prescriptive. While there is a Code of Conduct and practice rules he says: ‘We don't work on the basis of having a rule for every circumstance and eventuality.
‘Our approach is to be practical, pragmatic and proportionate. We will look at the individual situations that are presented to us and provide an answer,’ he says urging members and firms to come forward and speak to the regulator before problems develop.
‘We want to talk to and engage with members, not just step in when things go wrong,’ he adds.
This would seem to be an approach for a regulatory model that is best for consumers of legal services, the general public and CILEx members.
CILEx Regulation continues to look to develop its regulatory approach. Nowhere will this be more evident than with the launch of a new online portal, called Regulation Matters, designed for all CILEx-regulated professionals and businesses, as well as for consumers. The portal will share regulation features on best practice for firms, and interviews and case studies with existing CILEx Authorised Entities and other key legal stakeholders.
According to David, the information on the site will be presented using ‘non-regulatory’ language, and in an engaging manner that can be easily read on smartphones, tablets and other devices.
‘The message is striving for better communication as a regulator’, he says, ‘raising awareness of the opportunities that CILEx and CILEx Regulation can offer individuals and firms.’
The next immediate challenge for CILEx Regulation will be to become licensed to regulate alternative business structures – firms with a mix of lawyer and non-lawyer ownership – and it will be looking to submit an application to the Legal Services Board later this year.
For Helen Whiteman, CEO of CILEx Regulation, these are exciting times. ‘We expect an increase in the number of people with practice rights, and in the number of firms we regulate’, she said. ‘I believe that Regulation Matters will be a really different way for a regulator to get across the key principles and benefits of regulation to both members and to the public.’
CASESTUDIES
MJW Law, in Altrincham, was one of the first entities to be authorised by CILEx Regulation, opening its doors in September 2016. It was established by CILEx Fellow and Litigation Practitioner Mark Winton, who specialises in credit hire litigation and personal injury claims. The firm now employs six staff, including a senior litigator, who is a CILEx Fellow, and another lawyer completing the Level 3 CILEx exams.
Mark began his professional life in insurance brokerage, and moved into claims handling, working for a while at Direct Line. Moving into private practice, he switched to the claimant side and got a job at Amelans Solicitors in Didsbury, during which time he studied for his CILEx exams. He moved to various firms before becoming a consultant.
When CILEx Regulation was authorised to regulate entities, he says, it was the ‘final piece in the jigsaw’ for him. He says that he had been thinking about setting up on his own since 2009. He made enquiries with the SRA, as CILEx Regulation, then called ILEX Professional Standards (IPS), was not yet able to regulate entities.
‘At that time, IPS was looking at getting licensing rights, so I thought I’d wait and see what happened, because it was CILEx that had got me this far and I like to wave the CILEx banner wherever I can,’ he says.
Mark Winton maintained a close relationship with the regulator, and began the journey towards setting up his firm in 2015.
‘The process was fairly new then, and it was a bit of a learning curve for me and for the regulator, so I think it all took longer than it would do now,’ he says, adding that he had to wait six months for the advocacy course to become available.
His advice to others looking to follow in his footsteps is to make time to complete the application.
‘It is easy to think “I have too much to do” and to put it to one side, but you need to dedicate the time, away from your work, to do it.’
CILEx Regulation, he says, were ‘very helpful - I knew if I was unsure of anything or needed clarification, I could contact them and get the help I needed’,
While some questioned the amount of work required, Mark Winton defends the regulator’s demands, stating that Chartered Legal Executives need to be able to demonstrate their competence, and the regulator needs to be able to show that it is authorising the right people.
He concludes: ‘It will be a period of financial and general uncertainty, and it can be quite daunting. But, having done it and been through the pain barrier, it is worth it.’
Firth Law, in Oldham, was authorised in January 2017. It was set up by CILEx Litigator and Advocate Jan Firth, who specialises in debt recovery, financial litigation and insolvency. The business currently operates from Jan Firth’s home in order to keep overheads down, but after only six months she says that she is gaining new clients, and will look to expand and find premises next year.
Jan Firth had been in private practice for nearly 20 years, and then went to work in-house in 2013. Redundancy prompted her to set up her own venture, something she says she had been thinking of doing for some time.
‘I have always had a good following of clients and had kept in touch with CILEx Regulation, so was aware of the regulatory changes, which came at just the right time for me. I thought “it’s now or never”.’
She says: ‘CILEx Regulation really helped me and got my firm regulated in six weeks once I’d done all the paperwork, which they helped me through. They suggested changes to some of my documents, for example, the office manual and gave general guidance. They were fantastic. I couldn't recommend them highly enough.’
The whole process - getting practice rights and putting together the documents - she says took quite a long time, around 18 months, but she insists ‘it is well worth it’ Because it took a while before CILEx Regulation was authorised to regulate entities, Jan Firth says that she did consider going down the SRA route. But she says: ‘I felt it would in some way belittle what I’d achieved so far with CILEx. ‘We need to get out there and tell people we are just as good as solicitors. We have to work harder to prove we are just as good as solicitors, which makes us better lawyers.’