In its Strategic Plan 2010-2013, the SRA set out a clear programme of regulatory reform, and organisational and cultural change. We committed to delivering a programme which would
- fundamentally change our approach to regulation from a reactive, rules-based approach, to outcomes focused, proactively focusing our resources to areas of greatest risk,
- enable us to license alternative business structures (ABS), and
- radically transform the SRA as an organisation.
What we set out to deliver was—and remains—an ambitious programme of transformation that encompasses intensive policy development, consultation with legal services providers, consumers and other stakeholders, and a significant reform of the SRA around the three core regulatory functions of authorisation, supervision and enforcement.
At the forefront of our achievements to date has been the successful launch of outcomes-focused regulation, featuring the publication of the SRA Handbook, as well as the approval of our application to be a licensing authority for alternative business structures.
While these organisational and operational changes have been extensive, transforming working practices and our approach to regulation, they are not in and of themselves enough to enable us to meet the regulatory objectives set out in the Legal Services Act 2007.
The SRA must also address the role of legal education and training in advancing the regulatory objectives, and in particular the need to protect and promote the interests of consumers and to ensure "an independent, strong, diverse and effective legal profession" .
As set out by Professor Webb in his keynote address, 2012 is the critical evidence gathering phase of the Legal Education and Training Review. This will help us as we go into 2013 and beyond to determine the role the SRA needs to play in setting specific education and training requirements and overseeing their delivery.
We need to think in the round about the future separate and specific regulatory education and training requirements that should be placed on individuals and firms, rather than adopting the narrow historical focus of looking only at solicitors. For example, we already place requirements on firms to ensure a competent and ethical work force, but to what extent will firms be able to assure themselves of the competency of all their employees (including, for example, paralegals) in order to meet regulatory obligations? Is there still a need for separate competency regulation? Or should we rely purely upon the regulation of the service? Other questions that we shall be exploring include:
- What challenges does the new legal services market present for regulatory assurance of the ethical standards and competence of individuals providing legal services?
- What standards need to be assured and how should legal regulators approach the setting and maintenance of these standards?
- What approach should regulators take to assuring themselves that the established competency standards are met?
- How should regulators approach the task of assuring education and training providers are delivering the outcomes required of them?
- Which groups of individuals does an analysis of the broader workforce suggest should be the focus of our regulation of competence?
- How can regulators be sure that the regulation of competence is proportionate and does not create unnecessary barriers to entry to legal services?
- To what extent can the regulation by other legal regulators of competence be harmonised with the SRA's so as to minimise unnecessary barriers to entry to practise law? To what extent can we rely upon this regulation?
- How should the SRA ensure that it makes effective use of education policy as a regulatory tool? How can we use education policy to reduce the pressure on and complement other regulatory tools such as supervision, enforcement and formal standard setting in delivering our regulatory objectives such as consumer protection?
The work undertaken by Professor Webb and his team this year will provide the basis for the SRA, BSB and IPS to determine their approach to setting future education and training requirements. Major changes will not happen overnight and will involve significant stakeholder engagement, including formal consultation.
In implementing any reforms we shall pay particular attention to our obligation to ensure a diverse legal profession. The issue of diversity was a central discussion point for the SRA Board last week when it met to determine the SRA's future role in the setting of a minimum salary for trainee solicitors. As I am sure you will all be aware, stakeholder and media interest in the review of the minimum salary has been very high and much of the debate has focussed on the SRA's obligation to secure an independent, strong, diverse and effective profession. Many stakeholders put forward the view that a minimum salary promotes access to the profession for individuals from a range of backgrounds and that the SRA should continue to set a minimum salary for that reason. The SRA Board understood those arguments, and attached great importance to carrying out a thorough assessment of the potential impact of any change to the minimum salary requirements before making its final decision.
What the impact assessment revealed was a very complex and finely balanced picture of potential impacts, both positive and negative, with no clear finding in either direction. On the one hand, there was some evidence that individuals from some specific groups might be adversely impacted by a decision to remove the minimum salary requirement. On the other hand, there was also evidence to suggest that removal of the minimum salary requirement might result in the availability of more training contracts—training contracts which could provide opportunities for those same groups who might be potentially disadvantaged.
In making its final decision, the Board was particularly influenced by evidence which suggested that professions which have diversified routes to qualification have a more diverse workforce and, in particular, better representation of those from lower socio-economic backgrounds, regardless of their salary structure pre and post qualification. The SRA has, of course, been aware of this fact for some time and has been exploring alternative routes to qualification through its pilot of the work-based learning scheme. The pilot has tested a number of new approaches to qualification, offering the opportunity for individuals without formal training contracts to seek qualification by demonstrating their competence against a set of defined outcomes. We are also evaluating the new model designed by Northumbria University which combines all three existing stages of qualification—the academic stage, the Legal Practice Course and the training contract.
These are all very exciting developments in legal education and training, and they, and their ilk, have the potential to have a significant and positive impact on access to and diversity in the profession. By contrast, it is not at all clear that setting a minimum salary for trainee solicitors is an effective regulatory intervention in this respect. Indeed, with the Economic and Equality Impact Assessment showing no conclusive result either way, the SRA Board had to consider the prospect that continuing to set a minimum salary might, in practice, reduce access and diversity and certainly could not be relied upon. Therefore, after a very full and well informed debate, with access and diversity front and centre of the Board's consideration, and I mean each and every Board member, the Board decided that it is through initiatives to expand pathways to practice rather than the setting of a minimum salary, that the SRA is best able to encourage access and diversity.
We are awaiting the final evaluation report on all strands of the work-based learning pilot with great interest. We expect to receive this within the next month and will be debating its findings with our Education and Training Committee in June. We hope that it will provide some sound evidence to assist the LETR research team as well as providing us with the practical guidance that will shape the development of diversified pathways to qualification.
I'd like to end by pointing to the current and emerging environment within which the SRA is operating and the further evidence that this provides for a renewed focus on diversified education and training pathways. The SRA now regulates not only solicitors (and trainee solicitors) but, since the introduction of entity-based regulation in 2009, all other individuals in a firm, encompassing the broader legal workforce, including those paralegals with LPCs who cannot get training contracts. An even richer tapestry is created when we consider that, very probably, in the near future we will regulate a newly created authorised person category—will writer. All of this points to a future where we can no longer continue to recognise one qualification (i.e. that of solicitor) and one pathway to qualification. We must embrace the diversification of the legal services providers that we regulate and the diversity of roles and individuals within those providers, finding a way to recognise the multiplicity of skills and experience of individuals who will be on a range of different pathways. The challenge for us in the future, and this is why we are so keenly awaiting the outcome of the LETR, is how! These are exciting times!