The Law Society

REPORT

The Law Society

By Beth Quinn, Key Account Manager, The Law Society

REGULATION

Affordability and strong protection will be key for new SRA-run indemnity scheme

The SRA has announced that the Solicitors Indemnity Fund (SIF) will be replaced with its own indemnity arrangements from September 2023, in a move we welcome.

The SRA will maintain consumer protection for post six year run off cover with the same level of cover as the SIF via its own indemnity fund. This is likely to be a relief to the many members, and former members, who have been worried that the closure of SIF would mean the ending of PSYROC as a regulatory arrangement, when for most there was little prospect of finding alternative comparable protection on the open market.

The SIF was scheduled for closure in 2021 but following lobbying from the Law Society (and other key stakeholders) the SRA sought an extension to the fund so that it would have time to seek views on how to sustainably maintain essential consumer protections and develop a new policy for the future.

The Law Society called for the establishment of an indemnity scheme, ring-fenced for PSYROC claims and offering the same scope of protection currently provided by the SIF.

While we await the details of the new scheme, we are pleased to see that the SRA Board appears to have given due consideration to the profession’s views on this important matter. Their decision means that consumers will continue to enjoy long-term protections when they employ a solicitor for legal advice.

We want to be certain that the new scheme will be affordable in the long term, providing good value for money, and maintaining the strong protections that have benefited clients and solicitors alike under the SIF.

LSB gives green light to modest practising certificate fee increases

Last month, the Legal Services Board (LSB) approved a modest increase to the PC fee for individual solicitors of £20 for 2022- 23. The Law Society has acknowledged this decision for the increase, which will underpin support for the profession and better enable us to serve solicitors in England and Wales.

The cost of an individual practising certificate fee will be £286 for 2022-23 and is collected by the Solicitors Regulation Authority (SRA) and is either paid for by individual solicitors, or by firms on behalf of their solicitors. Most of this income is used to fund the activities of the SRA, with the remainder split between other organisations, including the Law Society.

The cost of an individual practising certificate has either been frozen or reduced over the last nine years. For example, the fee was £266 in 2021, compared to £428 in 2010. Additionally, the Law Society supported the profession when the pandemic hit in 2020 by reducing our share of the PC fee income, we received by £3m, and we maintained this level in 2021 as government restrictions continued.

We undertook our largest ever member consultation which revealed 67% of respondents supported the Law Society’s proposal to increase the amount we receive from the practising fee in 2022-23. Our main source of income is the funds we receive from the PC fee, and this determines what we can plan and undertake for you, the profession and wider society. We have ambitious plans for the coming year to deliver more of what our members have told us is of importance to them. This includes:

■ Highlighting the enormous contribution solicitors make to society

■ Defending the profession from attacks

■ Addressing threats to the rule of law

■ Making progress on diversity and inclusion, and

■ Providing world-class resources to support you and your business to thrive and prosper – (Including supporting professional excellence through events, e-learning, career development, practice guidance, free helplines, library enquiries and newsletters on a range of practices and topics).

Our new corporate strategy will be published in November 2022 which sets out our new vision, objectives and outcomes for the next three years.

GENERAL

Financial Benchmarking Survey

For over 20 years the Law Society’s Law Management Section has helped produce an annual financial benchmarking survey, which is widely recognised as the annual financial health check for law firms; enabling them to benchmark results against a wide range of other law firms and objectively test their internal perceptions against their peers.

Our 2023 survey is now open; it should take approximately 45 minutes to complete and should be emailed to the Law Society’s partner Hazlewoods at benchmarking@hazlewoods. co.uk. As specialists in law firm finances, Hazlewoods will collect and analyse the data on behalf of the Law Society. All data is kept securely and reported at an aggregated level to ensure firm anonymity.

Law Society annual statistics report 2021 launched (21 September)

A new report by the Law Society of England and Wales has revealed the number of solicitors on the roll reached an all-time high in 2021 and record numbers of students graduated with law degrees.

Key findings include:

■ In the twelve months to 31 July 2021, the number of solicitors with practising certificates reached 153,282, an increase of 2% on the previous year

■ A record number has also been reported for solicitors on the roll reaching 209,215, an increase of 3% from the year before

■ The number of women PC holders increased three times faster than the number of men; women now make up 53% of those practising in the profession

■ Representation of Black, Asian and minority ethnic backgrounds continued to grow, reaching 18% of those with known ethnicity

■ The proportion of solicitors working in-house grew to 25%, a steady average increase of 1% each year (this is still a likely underestimate as some PC holders are not officially recorded as working in-house)

■ The number of students graduating with first degrees in law from universities in England and Wales in 2021 was the highest on record at 18,927. 81% of these graduates achieved a first or upper second-class degree.

■ The median age for both men and women PC holders grew by one year, making the median ages 46 and 40 respectively as of 2021.

■ The number of firms within England and Wales have been steadily decreasing over the past 5 years, reaching 9,020 as of 2021.

■ A third of firm head office closures came from mergers and change of legal entity status.

Read the full report at www.lawsociety.org.uk/topics/ research/annual-statistics-report-2021.

DIVERSITY AND INCLUSION

New Law Society horizon scanning report: Neurotechnology, law and the legal profession

Our latest horizon scanning report, Neurotechnology, law and the legal profession contends that in the coming years neurotechnology will make an impact on the law thereby creating challenges and opportunities for the legal profession.

Neurotechnology is used to interact directly with the brain by monitoring and recording brain activity or acting to influence it. Advances in the coming decades could lead to lawyers grappling with the human rights implications of brain monitoring and manipulation.

■ Discover our horizon scanning series which discusses emerging topics and their possible impacts on the law and legal profession at www.lawsociety.org.uk/topics/ research/horizon-scanning.

■ These reports are a part of our wider futures and foresight programme, where we explore drivers of change, emerging signals and ask questions about the future to help our members prepare for longer-term possible worlds. ■

Beth Quinn