The searchers

The introduction of a new business structure for legal services providers this autumn means that solicitors will now also be able to go into partnership with barristers. Dr Brian Doherty is quick on the draw

Irish solicitors are already very familiar with the partnership model of delivering legal services. To date, this tried and tested business arrangement has been limited to solicitors entering partnerships with other solicitors.

However, the introduction by the Legal Services Regulatory Authority of a new business structure for legal services providers, due this autumn, means solicitors will now also be able to go into partnership with barristers.

Legal partnerships are an innovation introduced in the Legal Services Regulation Act 2015, with the aim of modernising and enhancing the delivery of legal services by allowing more flexible business arrangements among legal practitioners.

Section 2(1) of the act defines a legal partnership as “a partnership formed under the law of the State by written agreement, by two or more legal practitioners, at least one of whom is a practising barrister, for the purpose of providing legal services”.

The act therefore permits two new types of alternative business structures: solicitor/ barrister partnerships, and barrister-only partnerships. Legal partnerships will be able to employ both barristers and solicitors, and there is no limit to the number of partners in a legal partnership.

While legal partnerships are provided for in the 2015 act, their introduction required a legislative amendment to section 1. This amendment was included in the Courts and Civil Law (Miscellaneous Provisions) Act 2023, which has paved the way for the introduction of legal partnerships in the coming months.

The magnificent seven

Over the past several years, the LSRA has undertaken extensive preparatory work, including consulting with stakeholders on the mechanics of introducing legal partnerships, all with a view to establishing how best to regulate this new business model.

The underlying objective has been to ensure that legal partnerships offer something new to the legal services market, while meeting the regulatory objectives of the act – including in advancing the public interest, promoting competition, protecting the interests of consumers, and encouraging an independent, strong and effective legal profession.

Of particular interest to the LSRA have been the implications of a partnership comprising two different types of legal practitioner – solicitors and barristers – each with different professional duties and obligations.

We conducted our most recent consultation on legal partnerships in the spring of this year, when we invited feedback on a draft regulatory framework for legal partnerships.

As always, we are grateful for the input and insights from our stakeholders, including the Law Society, the Bar, and the King’s Inns, as well as insurance companies and State bodies. Their feedback has helped us to put the final shape on the enabling architecture for legal partnerships.

The wild bunch

In introducing this new regulatory framework, our aim has been to strike the right balance between facilitating more flexibility in the legal services market, as required by the act, while at the same time protecting consumers.

This has meant preserving some of the most significant aspects of the respective statutory obligations of solicitors and barristers in a legal partnership.

For example, in a legal partnership, solicitors will be able to hold clients’ money, while barristers will not. This arrangement reflects the current legal position.

Similarly, the introduction of legal partnerships does not mean that there will be changes to the operation of the solicitors’ Compensation Fund, which compensates clients who suffer financial loss caused by their solicitor’s dishonesty. The fund will continue to be paid for only by solicitors.

A legal partnership will be obliged to confirm to a client in writing – either upon, or as soon as practicable after, accepting instructions – certain information, including:

• That a legal partnership is subject to the 2015 act (and in particular section 45(1), which provides that a legal practitioner shall not hold moneys of clients unless that legal practitioner is a solicitor),
• That barristers in a legal partnership shall not, by any act or omission, interfere with the obligations of a practising solicitor in the legal partnership under the Solicitors Acts and any regulations made thereunder, and
• That the Law Society’s obligations to reimburse losses caused by the dishonesty of practising solicitors from the Compensation Fund does not extend to practising barristers in a legal partnership.

The legal partnership regulations will provide rules in relation to the naming, operation, and management of legal partnerships. These will be published in due course.

In the accompanying article, my colleague Padraig Langan provides further details on the process for notifying the LSRA that a legal partnership:

• Intends to provide legal services,
• Intends to cease/has ceased providing legal services,
• Has altered its membership, as well as
• Rules on naming legal partnerships, and
• How the online Register of Legal Partnerships will operate.

A fistful of dollars

So what could this new business structure mean for you and your practice? From the business point of view, the sharing of resources between solicitors and barristers may of course create efficiencies, which should result in cost savings.

For clients, legal partnerships involving solicitors and barristers may be attractive on the basis that what will be on offer is a bundled or integrated service from a single business entity, in effect a ‘one stop shop’ for legal services.

Another appeal for partners in a legal partnership is that they will be able to apply to the LSRA for limited liability partnership (LLP) status. What this means is that the partners will not generally be personally liable for the debts, obligations, or liabilities of the LLP itself or any partner or employee or the LLP.

As a new business structure in the Irish legal services market, legal partnerships will operate alongside the existing models of business used by legal practitioners, including sole-practitioner solicitors’ firms, partnerships of solicitors, barristers who practise as members of the Law Library, and barristers who practise outside of the Law Library.

The LSRA is satisfied that it has created a low-cost and effective regulatory framework that allows the required flexibility for different types of legal practitioners to work together with the potential to provide competitively priced legal services to consumers.

As the legal landscape evolves with this new innovation, the LSRA will continue to provide updates to legal professionals to facilitate your understanding of legal partnerships and what they could mean for you and your clients.

The LSRA will also periodically report to the minister on the regulation, monitoring, and operation of legal partnerships.

Dr Brian Doherty is the CEO of the Legal Services Regulatory Authority.

True grit

The LSRA is responsible for making regulations in relation to the operation and management of legal partnerships, which are a new business structure for legal services providers, writes Padraig Langan.

The Legal Services Regulation Act 2015 (Legal Partnerships) Regulations 2024 are expected in autumn 2024. I manage the team that, once the regulations are made, will be processing commencement notifications from barristers and solicitors who intend to provide legal services as a legal partnership, membership alteration notifications, and cessation notifications.

We will also establish and maintain a new online Register of Legal Partnerships.

How the west was won

In this piece, I will focus on the process to be followed to notify the LSRA you are a legal partnership.

The first thing to note is that this is not an application process, but rather that the legal partnership is notifying the LSRA of its intention to provide legal services – the basis of a legal partnership is a written agreement formed under the law of the State by two or more partners, at least one of whom must be a practising barrister.

Once formed, the legal partnership must notify the LSRA of its intention to provide legal services via a prescribed form and the payment of a €575 fee.
A legal partnership shall not provide legal services until it has notified the LSRA. The commencement notification form for legal partnerships will be available on the LSRA website.

The details to be completed on the form are:

• Name of the partnership (more on this below),
• Principal address, telephone number, and email address,
• The intended date of commencement,
• The names of all the partners and their practising barrister or practising solicitor reference number(s).

You must also confirm that the legal partnership has, or will have from the date of the provision of legal services, appropriate professional indemnity insurance cover in place, and supply the LSRA with the policy number(s) and the name(s) of your insurer(s) and broker(s), if applicable.

It is a good idea for potential partners to check the situation in relation to professional indemnity insurance cover as, dependent on how the partnership is made up, professional indemnity insurance obligations may arise under Law Society regulations, made under section 26 of the Solicitors Act 1994, or under the LSRA’s regulations, made under section 47 of the Legal Services Regulation Act 2015, or both.

(Revised LSRA PII regulations will also be made at the time the legal partnership regulations will be made.)

Once we receive your correctly completed commencement notification form and the full fee, the LSRA will check the details supplied and then either:

• Issue a response confirming that your legal partnership has been added to the Register of Legal Partnerships, or
• Request clarification regarding the details on the form.

Butch Cassidy and the Sundance Kid

It is important to note that there are certain rules around the name you may give to your legal partnership. These rules are in place to protect consumers as well as the reputation of the legal profession. This means that:

• If the partnership name consists of the names of some or all of the partners or former partners of the legal partnership, no prior approval is needed from the LSRA,
• If you wish to use some other type of name, then it must be approved by the LSRA in advance of sending us your commencement notification.

Your request for name approval must be made in writing to the LSRA at least 28 days (or such other time as the LSRA may allow) before you submit the commencement notification form.

To begin the name approval process, you just need to write to the LSRA with your proposed name, and we will consider your application in accordance with criteria set out in the regulations.

For example, in considering an application for approval of the name of a legal partnership, one of the criteria to be considered by the LSRA is whether the name has a meaning likely to bring the legal profession into disrepute, or that is in bad taste, or that reflects unfavourably on other legal practitioners.

Destry rides again

Much like the existing Register of LLPs, the new Register of Legal Partnerships will be publicly available on the LSRA’s website, and will be routinely updated.

If the particulars recorded on the register are inaccurate, the legal partnership must notify the LSRA as soon as practicable.

The LSRA, on becoming aware that any particular entered on the register is incorrect or has ceased to be correct, will make such alterations as it considers necessary.

Currently, only partnerships of solicitors may become limited liability partnerships (LLPs). However, with the advent of legal partnerships, these new business structures may also seek authorisation from the LSRA to become LLPs.

If a legal partnership is authorised by the LSRA to become a LLP, subject to exceptions, the partners will not be personally liable for the debts, obligations, or liabilities of the LLP itself or any partner or employee.

LLPs were introduced by the LSRA in October 2019 and have proven very successful – there are currently some 464 LLPs on the Register of LLPs.

This is a brief overview of the mechanics of becoming a legal partnership. As this new business structure is a novel development in the Irish legal services market, you are advised to familiarise yourself with the new regulations when they are available.

For further details please, see the LSRA’s website section on legal partnerships, which will be updated from time to time.

Padraig Langan is head of registration in the LSRA’s Levy and Fees Unit.