Understand the regulatory landscape
Legal services in England and Wales are regulated under the Legal Services Act 2007. The Solicitors Regulation Authority (SRA) authorises and supervises law firms, while the Legal Services Board oversees all approved regulators. Before you commit to setting up a firm, you need to understand which reserved legal activities require authorisation, how the SRA's regulatory framework applies to your planned practice, and what entity type suits your circumstances.
This journey walks you through each stage from understanding your obligations to being ready to accept your first clients.
Understand legal services regulation
An overview of the Legal Services Act 2007 framework, the reserved legal activities, and how the approved regulators fit together
Get SRA authorisation
You cannot practise as a law firm without SRA authorisation. Your first major decision is entity type: a recognised body (traditional law firm owned by solicitors), a recognised sole practice, or an alternative business structure (ABS) if non-lawyers will have ownership or management roles. Each has different application requirements and governance obligations. Allow at least 3 to 6 months for authorisation -- the SRA aims to decide within 90 days of a complete application and may take up to 180 days -- so factor this into your timeline before signing a lease or hiring staff.
Get SRA authorisation for your law firm
Covers entity type options, the SRA application process, authorisation timescales, and what evidence you need to submit
Set up compliance systems
Your Compliance Officer for Legal Practice (COLP) and Compliance Officer for Finance and Administration (COFA) are nominated and approved by the SRA as part of your authorisation application -- you must have them in place from day one. These are mandatory SRA roles, and in a small firm you may hold both yourself. You also need systems to comply with the SRA Standards and Regulations, including the Code of Conduct for Solicitors, the Code of Conduct for Firms, and the SRA Accounts Rules. Getting these systems right from day one protects your practising certificate and your clients.
Comply with SRA Standards and Regulations
Understand COLP and COFA responsibilities, the Codes of Conduct, reporting obligations, and how to build a compliance framework for your firm
Arrange professional indemnity insurance
You cannot practise without professional indemnity insurance (PII) that meets the SRA's Minimum Terms and Conditions. PII protects your clients if something goes wrong and is a condition of your authorisation. Most firms renew on 1 October, the traditional common renewal date, but your indemnity period runs from your own policy's inception -- the obligation is continuous qualifying cover, and you must have it in place before you start accepting instructions. Premiums vary significantly by practice area, so obtain quotes early. If your firm closes, run-off cover provides protection for six years after cessation.
Professional indemnity insurance for law firms
SRA minimum terms, the indemnity period, obtaining cover, run-off requirements, and what happens if you cannot find a qualifying insurer
Set up client accounts
If you hold client money, you must open a separate client account at a bank or building society in England and Wales. The SRA Accounts Rules require strict separation of client and office money, regular reconciliations, and an annual accountant's report. Getting client account procedures wrong is one of the most common reasons solicitors face disciplinary action. Even if you plan to avoid holding client money initially, understanding these rules is essential as your practice grows.
Manage client money under SRA Accounts Rules
Client account requirements, reconciliation procedures, the accountant's report, and common pitfalls that trigger SRA investigations
Implement anti-money laundering compliance
Law firms carrying out work in scope of the Money Laundering Regulations 2017 must register with the SRA as their AML supervisory body. You need a firm-wide risk assessment, customer due diligence procedures, ongoing monitoring, and staff training. The SRA is one of the most active AML supervisors in the UK and conducts thematic inspections. Failure to comply can result in fines, conditions on your authorisation, or criminal prosecution. Most firms in property, corporate, or private client work are in scope.
Anti-money laundering compliance for law firms
AML registration, risk assessments, customer due diligence, suspicious activity reports, and preparing for SRA AML inspections
Establish your complaints procedure
Before you accept instructions, you must have a written complaints procedure and inform clients of their right to complain. If you cannot resolve a complaint, clients can escalate to the Legal Ombudsman (LeO). You must also comply with the SRA Transparency Rules (introduced following the CMA's market study), publishing pricing information for certain services on your website. A robust complaints procedure is not just a regulatory requirement -- it builds client trust and helps you identify service issues early.
Handle client complaints at your law firm
Setting up your complaints procedure, informing clients, Legal Ombudsman referrals, SRA Transparency Rules requirements, and record-keeping obligations
Your complaints procedure must be in place before you accept your first instruction. The SRA requires you to inform clients in writing of their right to complain and how to do so, including the Legal Ombudsman's details.