Plant reflects on five years at helm of SRA: “It’s a far better place now”

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19 December 2014

Plant: call for structural independence

Charles Plant is leaving the Solicitors Regulation Authority (SRA) at the end of this month “in a great deal better state than where I found it”, he has said in an interview to mark the end of his five-year tenure.

The body the former Herbert Smith partner took over in 2010 was so “severely lacking” that a group of 14 major City law firms had written to the Law Society shortly before threatening to set up their own regulator, he revealed.

But he can now point to a new and better relationship with larger firms among a range of other achievements, whether a significantly reformed approach to education and training – including the reintroduction of a non-graduate route to qualification as a solicitor – the licensing of around 350 alternative business structures, a new SRA Handbook, outcomes-focused regulation (OFR) or a programme of cutting unnecessary red tape.

And Mr Plant leaves an organisation where the pace of change, if anything, is speeding up – over recent months there have been moves to reform professional indemnity limits and accountants’ reports, as well as the approach to licensing multi-disciplinary practices and the separate business rule.

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“We did have an ambitious programme,” he said. “Some said it was too fast and furious – I accept that it was demanding.”

Mr Plant acknowledged that the SRA did not anticipate the degree of opposition to the plan to reduce the minimum level of compulsory insurance cover to £500,000, but noted that the Legal Services Board did not bury the idea – it said the SRA did not supply enough evidence to justify such a move. “We will return to it in the context of the much wider review of insurance arrangements.”

He also observed that the changes that were made to the proposals on accountants’ reports after consultation gave lie to the notion that the SRA ploughs on with its agenda regardless of what those affected may think.

Having made peace with big firms, the SRA is now looking to improve its relationship with small ones: “We do need to concentrate on how we are perceived by smaller firms in particular.”

One sore remains OFR. “I recognise that the original approach was ‘one size fits all’,” he said. “While the larger firms seem very satisfied, among smaller firms some are, but some are plainly not. It’s an area we need to spend more time on.”

The small firm issue also meets the continuing problem of black and ethnic minority solicitors featuring in the SRA’s regulatory work in disproportionate numbers – although Professor Gus John’s controversial report earlier this year concluded that this was not because of the way the SRA went about making its decisions.

Mr Plant argued: “The important point that comes out of all these [reports] is that in so far as there is disproportionality, there’s disproportionality in relation to small firms, and it so happens that BME firms are small firms. It’s too simplistic to say that BME solicitors are disproportionately represented.”

Reaching out to small firms is also part of a wider piece on improving the way the regulator communicates and engages with the profession – he was clearly frustrated by the misjudgement recently that led to nearly 2,000 firms receiving letters from the SRA saying that their apparent lack of insurance meant they would have to start closing down. “It was a mistake and it shouldn’t have happened – but Paul [Phillip] and the team handled [the fallout] commendably.”

This highlights a conundrum though – while those at the top of the SRA preach a new approach to regulation, many solicitors will tell you that those on the frontline of the organisation still adopt the ‘old’ ways of nitpicking and looking to catch out their regulated community.

Mr Plant cautioned against relying on anecdotal evidence, saying “I don’t think the problem is as great as it was”. But equally he says the senior management at the SRA need to engage with staff “to make sure they get the message”.

At the same time, solicitors can expect a tougher time than previously if they do not meet their basic regulatory requirements – he remains “very surprised” by the numbers of solicitors who do not renew their practising certificate (PC) or indemnity insurance on time.

He said: “A couple of years ago, around PC renewal, the view was that we needed to understand their problems, help them through and so on. But the new approach is that this is unacceptable conduct. There are some solicitors who simply find it difficult to accept what their regulatory responsibilities are.”

It is impossible to reflect on the last five years without discussing the often rocky relationship with the Law Society. Or to put it more bluntly, the rows. “It has been distracting,” he conceded. “But with the changes there have been in the leadership of the Law Society, there is a far more constructive approach being adopted and a much better space to discuss things… We have all learnt from the battles of the last five years.”

Mr Plant is firmly on the record as calling for the SRA to enjoy structural independence from the Law Society, rather than just the operational independence it now has. He suggested gently that some at Chancery Lane may be coming round to the same point of view – moving from an attitude of ‘what we have we hold’ to one that questions whether being the approved regulator named in the Legal Services Act is actually in the interests of the society as a representative body.

But given the services shared between the two organisations, would not such separation cost the profession dearly?

Mr Plant thinks not. Such is the unwieldy approach to shared services at present, he is convinced that both sides could operate much more efficiently if left to their own devices. “I believe some of the additional costs that fall out of the Byzantine structure would be saved,” he added.

Another structure that some would like to see gone is the Legal Services Board (LSB). “The LSB fulfils a function and you have to ask what you would put in its place,” Mr Plant said, noting also that the SRA in the past “needed the LSB” when having problems in its dealings with the Law Society.

“With the Bar Standards Board doing entity regulation, as well as the accountants [and others], you can’t have some kind of regulatory contest reducing standards. You need somebody who can ensure that standards are maintained.”

But the LSB has not been without fault. “At times the LSB has been overly ambitious, very much driven by concepts of competition that aren’t completely right. I would like to see it adopt a lower profile.”

Not so much that it is eventually replaced by a single regulator though, a concept he believes would be “completely disruptive and is anyway not the answer”.

As it is, the LSB is co-ordinating steps that can be taken to reduce the problems left by the Legal Services Act and Mr Plant reckons that the changing of the guard across many of the regulators and professional bodies – including his own departure – offers an opportunity for those now leading the way.

“I’ve said to Enid [Rowlands – his successor] that with this complete change in personnel, it’s a very good opportunity to see what one can do and have more constructive relationships.”

Charles Plant recently turned 70 and will now be taking things a bit easier, although it would not be a surprise to see him re-emerge in some perhaps less demanding roles in the months and years to come – although he has nothing lined up right now.

He is proud of being a solicitor and of the profession he has overseen – the good far outweighs the bad. So has he enjoyed his time leading the SRA? “Mostly. It’s been very instructive to meet solicitors from every type of practice, hear about their problems, and hopefully find solutions.”

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