The Law Society is asking for views on possible alternatives to client accounts.
The Solicitors Regulation Authority is also expected to consult on the issue as part of its review of the Solicitor’s Handbook later in the spring.
Law Society chief executive Catherine Dixon said: “The Law Society would oppose any attempt to restrict solicitors from holding client money. We have seen no evidence that this is necessary or appropriate.
“We would be concerned that third party managed accounts could provide less client protection, be more costly and therefore financially damaging to firms and to the legal services market, in particular the conveyancing market.”
The SRA had previously proposed that solicitors would be allowed to use third party managed accounts as an alternative to handling client money themselves. The Law Society say their consultation exercise will help them to refine their policy position on alternatives to client accounts and inform discussions with the SRA and the Legal Services Board.