REUTERS | Russell Cheyne

Practical implications of the SRA three-year strategy

On 27 July 2017, the Solicitors Regulation Authority (SRA) launched a consultation on its new three-year corporate strategy for 2017-2020, which is open until 21 September.

Affirming the focus on high professional standards set in the public interest, the SRA strategy sets out five strategic aims which will have an impact not only dispute resolution solicitors, but on the legal industry as a whole. Paul Philip, SRA Chief Executive, said:

“Looking ahead, we want to do more to create a diverse, open and modern legal market: a market that provides accessible, affordable services and allows solicitors and law firms to thrive.”

The strategy has been developed against the backdrop of the significant changes in the legal industry in recent years, as well as anticipated changes in the near future. These include:

  • The increasingly broad range of businesses through which legal services are provided, which is expected to continue to grow and expand, providing increased choice to the public.
  • The recommendations made by the Competition and Markets Authority in its Legal Services Market Study, published in December 2016, including the need to provide better information for the users and potential users of legal services.
  • Clients’ expectations that legal services should be increasingly instant, agile and responsive to their individual requirements.
  • Changes to the UK-EU relationship as a result of Brexit.

As stated above, the SRA has five strategic aims.

First, it intends to set and apply consistently high professional standards for the individuals and firms it regulates, and make sure they are appropriate to meet the challenges of today and the future. This includes the following:

  • Introduction of a new Code of Conduct, in which there will be separate codes for individual solicitors and authorised firms, which follows the SRA’s consultation and engagement in 2017. It is hoped that the new codes will provide greater clarity and flexibility, and ensure a common set of high professional and ethical standards.
  • Introduction of a new Solicitors Qualifying Examination for would-be solicitors, to ensure consistent standards for entry to the profession. This is expected to be introduced from September 2020 at the earliest.
  • Continuing to collect and monitor data on diversity within the profession, which it will publish and use to engage with firms and other organisations to encourage increased diversity within all firms and at all levels within those firms.
  • Consultation on a revised and updated enforcement strategy to build on the SRA’s previous consultation, with the aim of providing greater clarity about the action the SRA will take when standards are not met and for the thresholds to determining the severity of a breach.

Second, it wants to make sure that the SRA’s regulatory requirements are proportionate. As such, the intention is to provide solicitors and firms with the flexibility to innovate and better meet the needs of members of the public and businesses, while maintaining appropriate levels of public protection. In addition to the revised Code of Conduct, the SRA also plans to:

  • Build on its consultation on simplifying the Accounts Rules.
  • Revise all rules in the SRA Handbook to deliver easy-to-understand and easy-to-navigate regulations that focus on what is important, rather than prescribing details about how firms must operate to achieve the requirements.
  • Review the Legal Services Ombudsman, the professional indemnity insurance requirements and the Compensation Fund, to ensure that the requirements on firms are proportionate, while at the same time providing adequate protection for the public.

Third, the SRA aims to increase the availability of relevant and timely information to help people make informed choices in the legal services market. This is so as to create a market in which people and businesses can find the right service, at the right time, at the right price for them. According to the report, nine out of ten members of the public and small businesses do not use legal services, despite often recognising that they would benefit from doing so. This shows the potential for growth in the industry. Members of the public and businesses should have access to comprehensive, relevant and easy-to-understand information about legal services to help them make a choice in legal services, including through third party comparison websites.

Fourth, the SRA’s goal is to make sure that its regulatory arrangements work as effectively as possible for the public, businesses, solicitors and firms in the context of constitutional developments within the UK and any new relationship with the EU. The SRA intends to work closely with the government and the legal profession to advocate and maintain existing cross-border recognition arrangements. This would allow firms in England and Wales to continue to enjoy the benefits from open markets in Europe, and from the ability to employ and work with lawyers from other jurisdictions. The SRA also plans to review whether the current cross-jurisdiction recognition arrangements with Scotland and Northern Ireland are operating to their best effect.

Fifth, it plans to work better together and with others to improve the overall effectiveness of the SRA, its responsiveness and the delivery of its regulatory functions.

As this summary demonstrates, the strategy is ambitious and wide-ranging. While the aims of simplifying various aspects of regulation (including the Codes of Conduct and SRA Handbook) are admirable, the practical implication will mean law firms having to invest time in making sure that they comply with the new requirements as well as training staff on the changes. However, by reaching out to even some of the nine out of ten members of the public and small businesses who do not use legal services, the potential for growth in the industry is encouraging.

Running until 21 September 2017, the SRA consultation asks for responses to five key questions:

  • Do you have any comments on the key factors identified in the legal services market and wider enviroment?
  • What should be the SRA’s key priorities over the next three years?
  • Do you have any comments on its proposed programme of work?
  • What in its Corporate Strategy 2017-20 do you think will make the greatest impact?
  • What has been missed?

Those who wish to submit their views can do so here.

Boodle Hatfield Becky Shaw

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