Buying a law firm is not like buying a corner shop. The Solicitors Regulation Authority (SRA) must approve any change of ownership or control before the transaction completes. Without that consent, the purchase is void and the buyer cannot legally practise as the new owner.

This requirement applies whether you are a solicitor buying your first practice, an existing firm acquiring another, or an external investor entering the legal sector through an Alternative Business Structure (ABS). The SRA's role is to ensure that the new owner or controller is fit and proper, and that the firm will continue to comply with the SRA Standards and Regulations.

In this guide, we walk through the SRA consent process for a typical law firm acquisition. We cover the two main routes: the SRA notification for a straightforward owner manager change, and the full ABS application when non-solicitor ownership is involved. We also flag common pitfalls that delay or derail consent.

The Two Routes: SRA Notification vs ABS Application

The SRA distinguishes between two types of ownership change. Which route you take depends on who is acquiring the firm and how the new structure is set up.

Route 1: Owner Manager Change (SRA Notification)

If the buyer is a solicitor or a recognised body (such as an existing law firm or an LLP whose members are all solicitors or other regulated lawyers), the transaction is typically a change of owner manager. The buyer must notify the SRA of the change, but does not need a full ABS licence.

This route applies when:

  • A sole practitioner solicitor buys another sole practice.
  • An existing law firm (partnership or LLP) acquires a smaller firm and all new owners are solicitors or registered European lawyers.
  • A solicitor buys into an existing partnership or LLP as a new equity partner, increasing their ownership stake above 25% or taking overall control.

The notification must be made using the SRA's online mySRA portal. You will need to submit the following within 28 days of the change taking effect:

  • A completed notification form (Form N for owner manager changes).
  • Details of the new owner manager(s), including their SRA number, practising certificate status, and any regulatory history.
  • A declaration that the new owner manager is not subject to any current SRA investigation or disciplinary action.
  • Confirmation that the firm's COLP and COFA remain in place and are aware of the change.

The SRA will review the notification and may request further information. In most straightforward cases, consent is granted within 2-4 weeks. However, if the buyer has a past regulatory issue or the transaction is complex, the SRA may require a full application.

If the buyer is not a solicitor or recognised body, or if the acquisition will result in non-solicitor ownership or control, you must apply for an ABS licence. This is a more detailed process that requires the SRA's prior approval before the transaction completes.

An ABS application is needed when:

  • A non-lawyer investor (such as a private equity fund, a corporate, or an individual with no legal qualification) buys a controlling stake in a law firm.
  • A solicitor wants to set up a new firm with non-solicitor partners or shareholders.
  • An existing law firm is converting to an ABS structure (for example, to bring in external capital).
  • A parent company acquires a law firm and the parent's directors are not all solicitors.

The ABS application is made through the SRA's online portal. You will need to provide:

  • A detailed business plan for the new firm, including financial projections for at least three years.
  • Personal statements from each proposed owner, manager, and COLP/COFA, including a declaration of fitness and propriety.
  • A compliance plan showing how the firm will meet the SRA's regulatory requirements, including the Accounts Rules, anti-money laundering obligations, and professional indemnity insurance.
  • Details of the firm's governance structure, including how non-solicitor owners will be prevented from interfering with professional independence.
  • A completed ABS application form (Form A) and the relevant fee (currently £2,000 for a new ABS licence, plus £600 per additional manager).

The SRA aims to determine ABS applications within 12 weeks, but complex cases can take longer. You cannot complete the acquisition until the SRA has granted the ABS licence. Trading without it is a breach of the SRA's regulatory arrangements and can result in fines or closure.

Key Documents You Need Before Applying

Whether you are notifying or applying, the SRA will expect to see evidence that the transaction is genuine and that the buyer is fit to own a law firm. Prepare the following documents before you submit:

  • Sale and purchase agreement. This should set out the price, the assets or shares being transferred, and any conditions precedent (such as SRA consent).
  • Due diligence report. A review of the target firm's financial position, client files, ongoing matters, WIP, and any regulatory risks. Your practice valuation should be part of this.
  • Proof of funding. Bank statements, loan agreements, or investor letters showing you have the funds to complete the purchase and run the firm for at least six months.
  • CV and regulatory history. For each new owner manager, a summary of their legal career, practising certificate history, and any past SRA findings or complaints.
  • COLP and COFA consents. Written confirmation from the proposed COLP and COFA that they accept the role and understand their responsibilities under the new ownership.

If the acquisition involves a change of COFA, you should also review the COFA fundamentals guide to ensure the new officer is properly trained and aware of their duties under the SRA Accounts Rules.

Even experienced solicitors can trip up on the SRA consent process. Here are the most common issues we see in practice:

1. Applying After Completion

The SRA requires prior approval for ABS applications and timely notification for owner manager changes. If you complete the acquisition before the SRA has given its consent, you are in breach of the SRA's regulatory arrangements. The SRA can impose a fine, suspend the firm's licence, or require you to unwind the transaction.

Always build the SRA consent timeline into your completion date. Allow at least 8 weeks for an owner manager notification and 16 weeks for an ABS application.

2. Incomplete or Inconsistent Information

The SRA will reject applications that are missing key documents or contain contradictions. For example, if your business plan shows a profit of £500,000 in year one but your funding letter only covers £100,000 of working capital, the SRA will question the viability of the firm.

Work with a solicitor accountant who understands the SRA's expectations. They can review your financial projections and ensure they are realistic and consistent with your application.

3. Ignoring the Accounts Rules

The SRA will check that the firm's client account arrangements are compliant. If the target firm has historical client account breaches, the SRA may refuse consent until those are resolved. This is particularly common when buying a sole practitioner's firm that has not had a proper SRA accounts rules review.

Before you submit, have the target firm's client account records audited. Ensure all reconciliations are up to date and that any residual breaches are disclosed to the SRA with a remediation plan.

4. Failing to Register as a Data Controller

When you acquire a law firm, you take on its client data. You must register as a data controller with the Information Commissioner's Office (ICO) before you take control. The SRA will ask for your ICO registration number as part of the consent process.

Post-Consent Steps: What Happens After the SRA Approves

Once the SRA has given its consent, you can complete the acquisition. But the process does not end there. You must take the following steps within 28 days of completion:

  • Update the firm's details on the mySRA portal, including the new ownership structure, managers, and COLP/COFA.
  • Notify the SRA of any change to the firm's practising certificate or recognised body status.
  • Transfer the firm's professional indemnity insurance to the new entity, ensuring continuous cover under the Minimum Terms and Conditions.
  • Update the firm's anti-money laundering policies and register with the SRA as a supervised entity if the firm's structure has changed.
  • Notify clients of the change of ownership, particularly if the firm's name or trading address changes.

If the acquisition involves a merger of two firms, you may also need to integrate the firms' systems, staff, and client files. Our post-merger integration guide covers the practical steps for combining two legal practices without disrupting client service.

When to Involve a COFA or Compliance Specialist

The SRA consent process is heavily compliance-focused. If you are not confident in your firm's regulatory arrangements, or if the acquisition involves complex ownership structures, engage a compliance specialist early.

A COFA or external compliance consultant can help you:

  • Review the target firm's compliance history and identify any red flags.
  • Draft the compliance plan and business plan for an ABS application.
  • Prepare the personal statements and declarations for each owner manager.
  • Liaise with the SRA during the application process.

For firms that already have a COFA, our COFA compliance support service can provide the additional resource needed during an acquisition.

Costs and Timescales: What to Budget For

The SRA's fees for consent are modest, but the overall cost of the process can be significant. Budget for the following:

  • SRA notification fee: £0 for owner manager changes (included in the firm's annual fee).
  • ABS application fee: £2,000 for the licence, plus £600 per additional manager.
  • Legal fees: £3,000-£10,000 for a solicitor to draft the sale agreement and handle the transaction.
  • Accountancy fees: £2,000-£5,000 for due diligence, financial projections, and tax advice.
  • Compliance consultancy: £1,500-£4,000 for a COFA or compliance specialist to prepare the application.
  • PII adjustment: Varies depending on the firm's risk profile and claims history.

Allow a total budget of £10,000-£25,000 for the consent process alone, excluding the purchase price. The timescale is typically 8-16 weeks from submission to consent, but can be longer if the SRA raises queries.

Final Checklist for Solicitors Acquiring a Law Firm

Before you submit your SRA consent application, run through this checklist:

  • Have you identified the correct route (notification vs ABS application)?
  • Do you have a signed sale and purchase agreement with a condition precedent for SRA consent?
  • Have you completed due diligence on the target firm's financial and regulatory position?
  • Do you have proof of funding for the purchase and ongoing working capital?
  • Are the proposed COLP and COFA in place and willing to accept the roles?
  • Is the target firm's client account compliant with the SRA Accounts Rules?
  • Have you registered as a data controller with the ICO?
  • Have you allowed enough time for the SRA to process the application before your intended completion date?

If you answer no to any of these, pause and seek advice. The SRA will not grant consent if the application is incomplete or the buyer is not ready to take on the regulatory responsibilities of owning a law firm.

For a full review of your acquisition plans, including a compliance health check and financial projections, book a free firm health check with our team. We specialise in advising solicitors on firm acquisitions, SRA consent, and post-completion integration.