Statement
SRA outlines way forward for considering firm governance arrangements
22 October 2026
Making sure that the sector has the right safeguards in place to address risks and protect consumers from harm is in everyone's best interests.
As the regulator, it is the SRA's responsibility to take action where we identify risks. We do this both directly through targeted action and more broadly by having effective and proportionate regulatory requirements in place.
It is in this context that earlier this year we brought forward new rules designed to strengthen the checks and balances provided by compliance officers where single individuals have significant power within, and control over, a law firm.
Taking action in areas of highest risk
As part of our supervision pilot, we are introducing new approaches for how we understand and manage risks in firms. We are also looking at adopting proactive approaches to supervising firms where we identify potential higher risks.
Through enhanced engagement, we will develop strategies for ongoing monitoring of these firms and where required take corrective action to mitigate identified risks. This approach will increasingly be adopted more widely to ensure we identify and respond to risks of consumer harm.
As part of this we are seeking assurances that firms have appropriate governance arrangements in place and that their compliance function is able to operate with the necessary independence.
Why have we paused to take stock on wider rules?
As we announced in September, we are pausing to take stock on the introduction of new rules requiring the separation of compliance and unilateral roles within firms. This follows feedback that our original approach could have had unintended consequences within smaller firms and sole practices.
This pause will give us the opportunity to work with stakeholders, including through working groups, to further explore issues relating to the proposed separation rules. Additionally, it will allow us to test alternatives and consider wider approaches to making sure appropriate governance arrangements are in place in firms that we regulate.
Allowing this process to take place fully, means we will not be rolling out the proposed rules as originally planned in January. Once a decision on future approaches and requirements has been made, we will make sure that there is an appropriate lead-in time for firms to implement any changes needed.
Aileen Armstrong, Executive Director, Strategy and Policy, said: 'As the regulator, we are committed to acting decisively where consumers are being placed at potential risk of harm. This includes both targeted activity with individual firms and working toward the introduction of wider regulations and requirements which will safeguard consumers of legal services.
'Already we have had productive conversations with stakeholders and will have even more moving forward. The insights we gain from these discussions are proving very useful in helping refine and develop our next steps.'