Starting a New Firm
Incorporated Practice / Limited Liability Partnership / Multi – National Practice.
Information and guidance is readily available from the Society’s Professional Practice team. Telephone 0131 476 8124 or email: Professional Practice fax: 0131 225 3864
Restriction on Practice as a Principal
Information and guidance is readily available from the Society’s Professional Practice team. Telephone 0131 476 8124 or email: fax: 0131 225 3864 Restriction on Practice as a Principal
The Restriction on Practice Rules which came into force on 30th November 2001 require you to have held an unrestricted Practising Certificates and have been employed as a solicitor for three years, of which at least one year must be immediately prior to starting your practice, unless you are joining a partnership containing at least one other solicitor who has been a principal for three full years.
Guarantee Fund
All Principals must pay the appropriate contribution to the Guarantee Fund for the whole of the current practice year which ends on 31st October. This does not fall to be apportioned according to when you start practice. Payment should be made to the Society before your start to practice (see Schedule 3 Part 1 of Solicitors (Scotland) Act 1980 (page F55 in Solicitors Professional Handbook)).
Professional Indemnity Insurance.
You must also effect your own Professional Indemnity Insurance (see the Practising Certificate Rules 1988 and the Professional Indemnity Insurance Rules 1995). You must at least have the minimum cover arranged by the Society under the Master Policy but you should also consider whether this cover will be sufficient taking into account the nature of the business you intend to carry on.
To obtain a proposal form for Professional Indemnity Insurance please contact Marsh, Orchard Brae House, 30 Queensferry Road, Edinburgh, EH14 2HS (DX 539940, Edinburgh – 19 or LP1 Edinburgh 15), tel. 0131 311 4200. Once completed and returned for processing Marsh will issue the appropriate Certificate of Insurance. They will provide you with a copy of the Certificate which must be sent to the Records department at the Society before you start to practice.
If your practice is to be restricted to Criminal Court work you will be able to obtain a substantial discount on the premium provided that you provide me with a written undertaking to restrict your practice in this way. When you set up in practice it is important that you put in place procedures and systems to reduce your risk of claims. I would recommend you read the Marsh Publication “Ensuring Excellence - Even Better Practice in Practice” .
Accounts Rules.
It is absolutely essential that before you start practice you should set up properly the account books and cashroom procedures that you will require to conform with the Accounts Rules. On page F1235 of the enclosed Solicitors Professional Handbook you will find A Guide to the Accounts Rules’ (as you will see later it also deals with the Accounts Certificate and Money Laundering). This is a good introduction to the Accounts Rules and highlights the matters to which you must give particular attention. This Guide however is not a substitute for the Rules themselves which should be read carefully.
The Council has instructed that a member of the Guarantee Fund Inspection Team should have a meeting with you before you set up in practice to discuss your proposals for compliance with the Accounts Rules and your general understanding of them. Please telephone the Guarantee Fund 0131 476 8127 or email: Guarantee Fund of to fix a mutually convenient time for this meeting.
I would also suggest that at a very early stage and before you start up in practice you should consult and take advice from an accountant or a firm of accountants who will advise you on the setting up of the appropriate bookkeeping procedures to conform with the Accounts Rules.
If you would like any help with choosing an accountant then please discuss this at your meeting with the Guarantee Fund Inspector or when you speak with Ms. Ramsay An inspection of your books in terms of Rule 17 of the Accounts Rules will be carried out to make sure that your bookkeeping system is satisfactory. The date of the inspection will be intimated to you after you have started practice.
You will require to provide the Society with an Accounts Certificate twice each year (the Accounts Certificate Rules 2001). The Guide to the Accounts Rules also deals with the Accounts Certificate. The first Certificate will be for the period of 6 months from the date you start practice. You may wish to have your accountant help you with the preparation of the Certificate. Each Certificate has to be delivered to the Society not later than one month after the end of the relevant period.
I would also draw your attention to the Society’s “Guidance on Capital Adequacy”. You should take into account the standards and tests in this guide when working out your budget figures, fixing the working capital you will require and preparing your business plan. It may not be possible to achieve the suggested standard in the early stages but if you cannot achieve the recommended performance in the medium term, please reconsider your plans.
Money Laundering
These Regulations are designed to prevent the proceeds of unlawful activities being legitimised by being applied to carry out legitimate transactions. The Money Laundering Regulations come under the Accounts Rules and you will require to conform with these. The Guide to the Accounts Rules also covers Money Laundering. You will require to verify the identity of every person seeking to form a business relationship with you or carry out a one-off transaction, maintain record keeping procedures and maintain internal reporting procedures. The article on Money Laundering in the Better Client Care and Practice Management Guidance Manual will also be helpful.
Value Added Tax
Before you start practice contact the appropriate Customs & Excise Office in your area to ascertain whether you need to register for VAT purposes. If you do have to register you should familiarise yourself with the VAT Regulations and what accounts need to be kept for this purpose. If you do not require to register you must inform the Scottish Legal Aid Board so that they do not need to pay VAT on your fees. If you subsequently require to register for VAT purposes it is essential that you immediately inform the Scottish Legal Aid Board so that VAT can be added to the fees payable to you.
Legal Aid Work
If you need a Legal Aid code number write to the Chief Executive, The Scottish Legal Aid Board, 41/44 Drumsheugh Gardens, Edinburgh, EH3 7SW (DX ED 250 or LP 2 Edinburgh 7). Inform him if you wish to be put on the duty list for Criminal Legal Aid.
If you already have a code you should intimate your new address to the Board. All solicitors undertaking Criminal Legal Assistance have to register with the Scottish Legal Aid Board.
Name and Address of New Practice
When you set up in practice you should inform the Society (Records department) using the form under ‘Moving Firm’ in this section of the website or in writing or by email, of the name, address, (including your postal code) phone and fax numbers and the email address of your firm and the date of the commencement of your practice. For completeness, it would also be helpful to have the date on which you left your previous firm.
A copy of your letterhead will be helpful for our record purposes.
Advertising
I would draw your attention to the Advertising and Promotion Practice Rules 1995.
Mainstream or Incidental Financial Business
If your firm wishes to undertake mainstream investment work authorisation is required from the Financial Services Authority whose telephone number is 020 7676 9715.
If your firm will be undertaking incidental financial business please contact the Director, Financial Services at the Society on 0131 476 8160 or email: Director, Financial Services.
It is not necessary to be either authorised by the FSA or licensed by the Society, but if you are not you must refer clients for all financial work to an IFA. If in doubt please contact the Director for advice.
Practice Management Course Rules 1997.
New partners will require to attend one of the Society’s Practice Management Courses if you have not already done so within the 12 months before you start practice or have previously been a principal in practice for at least 12 months in the 24 months before you start your own practice. The Courses are held twice a year and you will be contacted by the Update Department 0131 476 8182 or email: Update.
Computer hardware and software.
A list of hardware and software providers to the Scottish legal profession is available under the links heading on this web site.
The Data Protection Act.
You may need to comply with the terms of the Data Protection Act. Leaflets are available from the
Information Commissioner’s Office – Scotland. 28 Thistle Street, Edinburgh EH2 1EN
Telephone 0131 225 6341 email: Scotland@ico.gsi.gov.uk or ,
Information Commissioner. Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9 5AF
Helpline: 01625 545745 fax: 01625 524510 email: mail@ico.gsi.gov.uk
The Better Client Care and Practice Management Guidance Manual.
The Society’s Guidance Manual can be viewed on the website www.lawscot.org.uk The articles on Financial Management and control; the Master Policy for Professional Indemnity Insurance; Information Technology; Marketing Legal Services; and Letters of Engagement may be of particular interest.
New Firms Starter Pack.
The following items provide the basic information and documents required by a Solicitor planning to set up in practice in Scotland.
click here
Queries?
Ask Records or contact your local Council member or any of the Society’s Heads of Department, whose details are available on our web site. It’s never too early to call your Society.
