Editor AccountingWEB
Share this content
Law reports
istock_ytwong
Tags:

ICAEW gets reserved legal services recommendation

by
30th Jun 2017
Editor AccountingWEB
Share this content

ICAEW members are one step closer to offering reserved legal services in a move that could recover some of the work firms may lose through Making Tax Digital, the Institute said.   

In a letter to the Lord Chancellor the Legal Services Board (LSB), the independent body responsible for overseeing regulation in the legal sector, recommended ICAEW’s application to be a regulator and licensing authority of five reserved legal activities.

Duncan Wiggetts, ICAEW’s executive director of professional standards, called the approval of ICAEW’s application a “positive step” for consumers who want to use a qualified ICAEW chartered accountant firm. “The LSB’s decision is evidence of the role that it is playing in transforming the provision of legal services and giving more choice to the consumer,” he said.

The LSB's decision would allow ICAEW to extend its regulatory and licensing authority activity to conduct of litigation, rights of audience, reserved instrument activities, notarial services, and administration of oaths. The first three of these services would be restricted to taxation services only.

Replace compliance gap created through MTD

Because of the emphasis this licensing has around taxation – particularly advocacy and trustee work – Peter James, the ICAEW’s head of regulatory policy, said that the expanded governance would allow firms to recoup work lost through the gradual digitalisation of tax.

“Typically the work of an accounting practice at the moment is one for tax advice, and two for compliance. If that compliance work comes down [because of MTD] they'll be looking to try and replace that in some way,” he said.

“The opportunity here to be able to not just prepare documents for court cases around tax but actually to go and present the arguments is an added skill base they'd be able to use. And from a client's point of view, they do not have to see different people in order to get a tax bond dealt with.”

Opportunity for smaller firms

While the legal services greenlight would be something that interests larger firms that want to widen their services, it also opens an opportunity for smaller specialised firms who offer tax investigations, trusts, and estate services to include probate services or mergers between accountancy firms and solicitors.

“We haven't set up a qualification and training to do the advocacy side, but what a firm can do is bring a qualified solicitor or barrister onto its books to be part of the workforce and they could deliver direct to clients,” James said.

While this is more of an option for medium-sized firms, James advised that smaller firms could bring in a solicitor from the high street to do the court work and other legal work in order to widen the appeal of the accountancy practice to a professional service type practice.

More regulatory options builds on probate services 

The professional body’s decision to expand further into the legal sector builds on its probate services regulation, which it has offered since 2014. Since then, 280 firms have been approved by the Institute to provide services. 

If ICAEW is successful with its application, the body will become the first legal regulator and licensing authority to regulate all six reserved legal activities and the second approved regulator for notarial services since 1533. As per the timeline revealed on its website, ICAEW expects to be in a position to authorise firms and license ABSs within 12 months but that does depend on the LSB’s own timetable.

James envisages that the ICAEW could start taking applications from January next year.    

Is this something that you'd be likely to take up? What effect do you foresee this having on the profession and the services some firms offer? Do you expect medium to large firms to introduce a new position in their firm to strategically leverage these services? 

Tags:

Replies (6)

Please login or register to join the discussion.

avatar
By partner55
30th Jun 2017 09:37

The administration of oaths would be very useful for those of us doing probate work.

Thanks (1)
avatar
By Justin Bryant
30th Jun 2017 11:40

The firms' insurers will presumably only agree to this if the staff are suitably trained & qualified and most lawyers take a few years to understand the ins & outs of drafting legal documents etc., and clients may prefer someone with conventional legal qualifications etc., except perhaps for the most basic of legal work, so in practice this may not have much impact. Looking at things the other way round, you wouldn't normally ask a lawyer to do your accounts & tax return would you?

Thanks (0)
By James Green
30th Jun 2017 13:31

What I believe we are seeing with this is the start of the process of deregulation of law in the same way accountancy was with the continued upwards push of the audit thresholds.

Like accountants, lawyers have an increasing number of regulators and qualifications (CILEx anyone) and are operating increasingly polarised practice models with GPs being pushed down the path of price completion because others can do what they do for less (e.g.: HR companies, debt collection companies, CLC conveying etc etc) while the magic circle share multi million profits across their partners.

I also believe we, as accountants, are going to end up the winners of this; we run better businesses (accountancy firms can be bad, but wow, have you looked at lawyers practices?), systematise more, are trained to look more holistically than lawyers at "the business" and (on the whole) have more customer service skills.

Interesting times indeed.

Thanks (3)
avatar
By njpandya
01st Jul 2017 21:42

Does this mean ACCA will be also be able to provide these legal services, like ICAEW? Can anyone please advise?

Thanks (1)
Replying to njpandya:
By michaelbeaver
03rd Jul 2017 09:13

Unless the ACCA applies to regulate these reserved services, then no.

Thanks (0)
avatar
By AndrewV12
03rd Jul 2017 08:20

Changing times indeed.

Thanks (0)