Revealed: Law Society Council cut PC fee

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6 August 2010

Price cut: Council decision saves solicitors £32 each

The Law Society Council decided to reduce the practising certificate (PC) fee requested by the Solicitors Regulation Authority (SRA) from £460 to £428, Legal Futures can reveal.

It made the move after changing the Law Society’s approach to paying its contribution to the set-up costs of the Legal Services Board and Legal Ombudsman. This does not impact the SRA’s budget and so is unlikely to have repercussions for relations between the Law Society and SRA.

Earlier this week, the Legal Services Board approved the level of practising fees for 2010/2011 at £428 as the SRA introduces a new fees policy that combines individual and firm fees, necessitated by the advent of firm-based regulation. This will raise £121.7 million for the Law Society Group.

In June, however, the SRA board approved a funding requirement of £127.9 million and a PC fee of £460.

A joint statement sent to Legal Futures by the Law Society said: “The decision on the overall level of funding for which LSB approval should be sought is for the Law Society Council, although the Society naturally consults the SRA closely about it. The funding requirement for 2010/11 was reduced from £127.9m to £121.7m because it was decided not to seek to smooth the level of practising fees by collecting the final tranche of the Society’s share of the implementation costs of LSB and LeO in advance and instead collect only the money which will be needed for next year. This decision does not have a direct impact on the budgets for SRA or the Law Society for 2011.”

This means the £121.7 million is broken down like this:

  • Central costs (shared services, facilities, pension payment etc): £68.9 million
  • SRA: £25.6 million
  • Law Society (as representative body): £11.1 million
  • Solicitors Disciplinary Tribunal: £2.2 million
  • Legal Complaints Service: £1.7 million
  • LSB/LeO costs: £12.2 million

The new fees policy means that 60% of the funding requirement comes from firms and 40% from individuals. The split is a starting point, and may well change in the following years to reflect the increasing regulatory focus on firms.

It also produces a 60% reduction in the fees for employed lawyers as they are not required to pay the firm fee. This translates into a shift of the fee burden onto private practice of approximately 15%, which the SRA says better reflects the cost of regulating the in-house sector.

John Bleasdale, chairman of the Commerce & Industry Group, which represents in-house solicitors, hailed the change as “the culmination of an eight-year campaign in which previous C&I Group chairs, together with council members, have lobbied extensively for reform, so that the proper costs of regulation are borne where most appropriate, and are proportionate, fair, and justifiable to members”.

He added: “The announcement today is also doubly welcome to some of Britain’s corporate employers who, in difficult economic times, will welcome the reduced regulatory cost.”

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