Cost of practising as a solicitor to rise sharply
Law Society: £5m provision for end of assigned risks pool
The cost of practising as a solicitor is set to rise at a rate of more than four times inflation, if the Law Society’s council approves figures that will be put before it later this week.
The collection of £116.8m in fees from the profession in 2014 is the sum required by the society to cover the group budget, up £13.2m on this year.
This is made up of the Solicitors Regulation Authority (£30.8m), the Law Society (£15.2m), shared services (£56.2m) – made up predominantly of finance, IT and facilities – and projects (£10.2m).
With the Law Society and SRA’s operational budgets relatively flat, the increase is made up of provision of £5m for liabilities from the last year of the assigned risks pool, a further £5m to “replenish reserves” and £2.5m for SRA IT projects.
Of the £116.8m, 40% is paid by individual solicitors and 60% by firms.
It equates to a practising certificate (PC) fee of £384 for each solicitor, up £40 from last year’s figure of £344 – itself an above-inflation increase from £328 in 2012.
The £40 represents an increase of 11.6%, which is more than four times the consumer price inflation rate of 2.7% recorded in May 2013.
The £384 is still well below the £428 charged to solicitors by the society in 2011. However, in that year the compensation fund levy was just £10.
Despite the extra contribution to pay for the unexpectedly high costs of interventions, the compensation fund charge is set to fall by £36 – from £92 last year – meaning each individual contribution will be £56 in 2014. If this saving is set against the PC fee rise, the total increase is just £4 year on year.
Firms’ practising fees are set to rise by between 10% and 13% – meaning, for example, an extra £1,200 for a firm with a £2m turnover – but their contribution to the compensation fund will fall 57% to £852.
The budget also includes levies to pay for the Legal Services Board, Legal Ombudsman and Solicitors Disciplinary Tribunal.
If the council approves the amounts to be raised, the Legal Services Board will have to rubber stamp the figures next month before the collection period begins in mid-September.
Tags: compensation fund, Law Society, Solicitors Regulation Authority
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