Revealed: PwC called in to improve "collaborative working" between Law Society and SRA

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By Legal Futures

15 December 2011

Townsend: support some of PwC's proposals but not all

The continuing tension between the Law Society and Solicitors Regulation Authority (SRA) has been exposed by the revelation that the society brought in PwC to help improve “collaborative working” between the two – but that the SRA has rejected some of the accountants’ recommendations.

Recently published minutes of the last Law Society council meeting record “huge concern” expressed by chief executive Des Hudson that the SRA was not managing outcomes-focused regulation (OFR) through the expected governance processes. He also “provided a number of examples of non-collaborative working by the SRA”.

Other concerns included the consequences of the SRA not delivering the enabling programme – which aims to upgrade its IT – on time or within budget, and how the IT element of the SRA’s move to a single site in Birmingham next year would be managed.

The minutes said the society’s audit committee had commissioned PwC to recommend a process for collaborative working between SRA and Law Society. “The society would adopt all PwC proposals, but the SRA opposed the adoption of all proposals… The society felt that the PwC proposals supported change management which would enable SRA and Law Society to debate issues together.”

Mr Townsend told Legal Futures that the SRA has discussed the PwC recommendations with both the Law Society and the audit committee. “We support some of the proposals, but not all.”

He continued: “In terms of governance, the introduction of OFR is being tightly managed by the SRA, and will be regularly monitored by both our senior management team and the board. It is an integral part of the SRA’s reform programme, and is rightly being managed by the SRA. We will publish data on our performance.”

The society declined to comment, saying it preferred to debate the issues with the SRA at the moment.

The Law Society and SRA have had a difficult relationship from the start and it came to a head during the debate last year over whether the SRA should apply to become an alternative business structures licensing authority. The pair have recently agreed a new governance structure, and the Legal Services Board is expected to state in the next few days whether the arrangement matches up to the demands in its internal governance rules for regulatory separation.

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