Rogers: Firms need to ensure they remain compliant, not just to “tick” a regulatory box but because it makes good business sense
By Brian Rogers, director of regulation & compliance services, Riliance
As a provider of regulatory and compliance software and support services to law firms, I could not resist the temptation to attend the conference and hear what the various international regulators had to say on the topics open for discussion over two days.
The attendee list was a who’s who of international regulators, including those from America, Canada, Australia, Holland, South Africa, Singapore, Hong Kong, Scotland, Ireland, New Zealand, etc. The UK was well represented by the SRA, BSB, ILEX, LSCP, and LSB.
Baroness Deech QC (Hon), Chair of the Bar Standards Board, opened the conference giving an overview of the current UK legal landscape, and her thoughts (and opposition) over the proposal to create a single regulator for all legal service providers.
The conference heard from a variety of speakers on the following topics:
- Re-engineering regulation – a session looking at how a number of jurisdictions have re-examined why and how they regulate the legal services market. Speakers from: SRA, Nova Scotia Barristers Society, Singapore Ministry of Law
- Education and training – does the recipe matter if the food tastes good? – a session looking at the questions many jurisdictions are considering in relation to the education and training of future legal practitioners. Speakers from: SRA, Law Society of Scotland, Hong Kong Law Society, Florida Bar
- Controlling the cost of regulation – a session looking at the tools and approaches that regulators can use to manage limited resources and control costs of intervention and bringing disciplinary cases. Speakers from: LSB, State Bar of California.
- Multi-disciplinary practice – a session looking at the challenges of MDPs and how co-regulation can operate in practice. Speakers from: SRA, PWC Legal LLP, Netherlands Order of Advocates.
- Can we nudge lawyers into compliance? – a session providing an insight into the use of behavioural economics techniques in regulation as a means of improving compliance. Speakers from: New Zealand Law Society, University College London.
- Should lawyers be allowed near client money? – looking at the scope for a radical rethink of the accounts rules. Speakers from: Singapore Ministry of Law, Attorneys Fidelity Fund South Africa, SRA.
- Non-lawyers – a session providing an update on developments in non-lawyer involvement in legal services around the world. Speakers from: LSB, European Commission, Marsh, Law Society of Scotland.
- Playing cross-border catch-up – a session looking at how lawyers and their regulators are contending with the demands of globalisation. Speakers from: Norton Rose Fulbright, Conference of Chief Justices USA, Skadden Arps Slate Meagher & Flom.
- Keeping up with the challenges of technology – a session looking at the impact of technology on legal practice; the challenges it poses for regulators and the opportunities it presents. Speakers from: Council of European Bars and Law Societies, PNCR, Law Society of England & Wales, Peppermint Technology.
- Death and taxes – what certainties exist for regulators? – a session looking at the coming challenges for legal regulators over the next few years and how regulators can better share ideas and research and work together in future. Speakers: Creative Consequences (consultancy run by ex-regulators from Australia).
Some key points were made by the SRA relating to law firms in England and Wales:
- Direction of Travel
– OFR is a challenge for many small firms
– Many firms are risk averse, which drives up their compliance costs
– The SRA needs to do more for small firms
- There are a raft of proposals for small businesses, for example, the ability to choose a level of PII that is appropriate
– There needs to be a move away from ‘one size fits all’ regulation
- Mixture of principles/rules approach for different type of firms
- Training for Tomorrow
– To focus better on ensuring standards
– To remove unjustifiable barriers by creating new, flexible and innovative ways to qualify
– Competence Statement
- Will apply to all solicitors and all areas of practice, and cover:
- Ethics, professionalism and judgement
- Technical legal practice
- Managing self and own work
- Working with others
Keys points made by the LSB about solicitors:
- Practising certificate fees paid by solicitors for the SRA – £53.7m (2013)
– Statutory levy for the LSB, LeO, SDT – £21.3m
- There is far more to comply with than in the US!
- Nobody knows the true cost of compliance but the LSB is trying to find out!
The conference gave an interesting insight into how various regulators are dealing with their regulated communities with many looking to introduce new regulatory regimes in the next 12-18 months; both the England & Wales and Singapore jurisdictions were held out as good examples of effective regulation and ones to watch and follow.
The American regulatory regime is an interesting one in that it is made up of 56 separate jurisdictions with different approaches in many; if you thought the England & Wales regulatory regime was tough you should try going to California where the regulators are in favour of putting wayward lawyers behind bars!
The regulatory regime in England and Wales has and is going through a period of significant change, and this is likely to continue with the creation of a single regulator and a single set of rules for all legal professionals within the next 3 years, according to the new Chair of the LSB who has been told to plan for his and the LSB’s own demise!
It was clear from the conference that regulation is not something that is going away, and it will be for firms to ensure they remain compliant, not just to “tick” a regulatory box but also because it makes good business sense!
Author: Brian Rogers, Director of Regulation & Compliance Services at Riliance.
