News release

SRA reforms will benefit all sectors of the profession

The Solicitors Regulation Authority (SRA) has emphasised its commitment to delivering its programme of regulatory reform to support innovation and reduce regulatory burdens.

Chief Executive Paul Philip used his speech at the Westminster Legal Policy Forum today (Thursday 4 September) to repeat the commitments made in the SRA's Regulatory Reform Programme. The Authority said in May that it would look to make it simpler for firms wishing to integrate the delivery of legal services with other professional services by adopting a different approach to licensing multi-disciplinary practices.

Paul Philip told delegates at the forum in London that while the licensing of alternative business structures (ABSs) over the last two years had gone well, larger companies offering a range of services were notable by their absence. He said: "These were exactly the type of business the Legal Services Act was expected to facilitate: a 'one-stop-shop' for consumers; opening up access to legal services, increasing competition in the market, driving down costs and improving value for money.

"The benefits of such services were expected to be seen at all levels with small MDPs entering the market to provide improved services to small businesses and, at the other end of the market, major existing professional services firms providing increased competition in the UK and globally to the major international law firms.

"However, such entrants have been few and far between and we've concluded that we need to do more to facilitate their entry. The scope of our regulation and how it applies to MDPs is at the root of the problem."

Paul Philip said the SRA proposed radical changes to the way it governs authorisation of ABSs, which have been consulted on and will be presented to its Board later this month. This in turn would lead to a review of the SRA's Separate Business Rule to ensure that traditional solicitors firms are not disadvantaged in the marketplace.

Delegates were also told how the SRA's work would make good on the promise to support smaller firms, some of whom may have felt neglected by the Authority as it had focused resources on the bigger, high-profile firms. Paul Philip said: "Our programme will also focus on small businesses to ensure that the burden of regulation does not unduly fetter their ability to compete and thrive. This will include a review of the COLP and COFA arrangements for this sector, looking at whether this framework is really required for such businesses, or whether it's overkill.

"We have committed to a programme of increased operational efficiency, speeding things up, and improving customer care for everyone who uses our services. The journey will take some time, but we will get there.

"For example, in 2015 our operating budget will be £47.7m, down by ten per cent from £52.8m, while practising fees for individuals and entities will reduce this year, and we have also been able to reduce contributions to the compensation fund by 37 per cent. These are the "green shoots" of change at the SRA."

Other areas delegates were told were part of the SRA's reform programme included reducing the minimum terms and conditions for professional indemnity insurance and removing the requirement for compulsory continuous professional development hours.

Further information on the SRA's Regulatory Reform Programme can be found here: Go to the Regulatory Reform programme page

Speech transcript: The future of legal services regulation

 
Print page to PDF