The Law Society and SRA will rise to the challenge of regulatory change

first_img Robert Heslett is president of the Law Society A favourite quote of mine often used at this time of the year comes from a poem written in 1908 by Minnie Louise Haskins: I said to the man who stood at the gate of the year,”Give me a light that I may tread safely into the unknown.” This has been, and will continue to be, a time of great change for the profession. The opening of the year also puts me in mind of Donald Rumsfeld: ‘As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. That is to say, we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know we don’t know.’ What we know is that on 1 January 2010, the Legal Services Board became fully operational, taking full possession of the powers granted to it by the Legal Services Act. Among other things, this means that, in time, the finances of both the representative and the regulatory arms of the Law Society will be subject to final oversight by the LSB. Although we do not know precisely how these regulatory powers will be used, the goal is clear. The LSB will ‘reform and modernise the legal services market place in the interests of the consumer – enhancing quality, ensuring value for money and improving access to justice across England and Wales.’ This is an ambitious goal, and one shared by the Law Society. There is constant tension regarding the question of whether change is best engineered from the top down by the overseer or from the bottom up from those who know the market and are already well-versed in the need for innovation and of meeting intense competition on a daily basis. This constructive tension is reflected in the current regulatory framework. You may have read the recent research commissioned by the LSB that found that 75% of clients consuming legal services were satisfied or very satisfied about the services received from solicitors. Rules can change but it is the market that decides which services are needed and the method by which they are delivered. Reforming the approach to regulation may be desirable but the question of how the market will look in five years’ time is a ‘known unknown’. Lasting settlementEarly in my presidency, I said that there was a need for the representative Law Society to come to a lasting settlement in terms of its relationship with its regulatory arm, the Solicitors Regulation Authority. I am happy to say that a collaborative approach to the approval of rules governing the relationship should secure sign-off from the LSB in April. Under the stewardship of its new board and chairman, the SRA is fully committed to regulating in a manner appropriate to the needs of the public, consumer and the profession. Both arms of the Law Society are now free to concentrate on their respective areas of interest. For the SRA, this means securing both outcome and entity-based regulation and the introduction of a fairer practising certificate fee system, designed to broker an equitable solution for a diverse profession. The SRA must also secure its position as the principal licensor of alternative business structures. The timetable imposed by the Legal Services Board for the licensing of the first ABS is properly described as aggressive. From both a regulatory and representative standpoint there is a shared philosophy regarding ABSs, in that both arms are determined to secure a level playing field for all law firms and potential new entrants into the legal services market, while at the same time ensuring access to justice for consumers. The Law Society itself, as approved regulator and representative of the solicitors’ profession, has engineered a dynamic shift in attitude so that the views of the regulated community are now given proper regard. This is evidenced by the outcomes of the recent reviews commissioned by the Society and conducted by Smedley and Lord Hunt. It may be that there will be many across the profession who will find a liberalised regulatory framework difficult and a new code of conduct irritating at best, especially when the recession is still biting at the heels of many. The Society is committed to providing a full range of services which will help its members deal with constant and unremitting change. Already on offer are a range of seminars and training sessions on law firm management and ABS, the Lexcel practice management standard, detailed practice notes on compliance, qualified assistance from the Practice Advice Service, advice for firms navigating the professional indemnity insurance market, and much more. These programmes will be expanded and new services developed as necessary in close collaboration with the SRA to ensure that all solicitors are well-equipped to cope with forthcoming regulatory change. It has been a turbulent period for the profession over the last decade. None of us can be entirely sure when this turbulence will pass. What we do know is that the Law Society and SRA will work together to ensure the best regulatory outcomes for the public, consumers and the profession – and rise to the challenges presented by the ‘unknown unknowns’. last_img

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