Posted by Brian Rogers, regulatory director at Legal Futures Associate Access Legal
Working with so many law firms, I’m often asked whether the Council for Licensed Conveyancers (CLC) or Solicitors Regulation Authority (SRA) is better for conveyancers.
But it’s not about whether one outperforms the other – indeed, the CLC Handbook also covers much of what is covered by the SRA’s Standards and Regulations to maintain compliance and ensure that clients receive the same high-standard of service whichever legal entity they choose.
One reason why conveyancers might choose the CLC over the SRA is because they can act for both sides in a property transaction relatively easily.
The main stipulation from the CLC, as detailed in the conflict of interest code, is that there is informed and written consent, and that individuals are represented by different authorised persons and parties at the firm.
The SRA codes of conduct state that it is not acceptable for the firm to act for both clients in the same transaction, except in a small number of exceptional cases due to the risk of a conflict of interests.
However, the Law Society recognises that, while both sides have a common interest in completing the sale, their interests differ because one is buying and the other is selling, so it’s unlikely to be a problem.
It’s often standard practice for CLC-regulated firms to handle both sides of a transaction because it helps to speed up communication and the completion.
But firms should be aware of risks too – including the loss of revenue and clients that can happen due to what the CLC’s code calls the “inequality of influence or disproportionate bargaining power”.
In effect, firms looking to move to SRA regulation would face real restrictions in the way they have historically operated, whereas under CLC regulation they had more freedoms, subject to meeting overriding ethical requirements.
For the more cautious firms, the SRA’s approach of only being able to act for one party might therefore be more preferable.
Alongside this, there are three further factors to consider.
First is the proportion of your work that comes from conveyancing and related services like wills and probate.
As the name makes clear, the CLC specifically regulates this area of law, so you’ll receive resources, training and updates relating to it.
Potential clients may look to see whether a solicitor is specifically licensed by the CLC when completing a property transaction, so it could make better business sense for you to choose it.
That said, the SRA is well known and might just as easily be the first port of call for members of the public.
At this point, it is worth thinking about your future business plans, including whether you may expand your conveyancing or other services.
Of course, it’s possible to switch regulators – you may be planning to do so right now – but remember there are processes to follow, including amending your professional indemnity insurance cover, which takes time and resources.
Second, cost is another key driver for firms but, as always, the devil is in the detail.
The SRA and CLC set their own fees for individuals and practices. Fees can change each year and in both cases are charged at a flat rate for individuals or calculated as a percentage of turnover for firms.
Alongside upfront fees, there could be other hidden costs associated with switching regulators. For example, staff may require additional training to bring them up to speed with what the new regulator expects, so an investment of fee-earners’ time is required.
Yet the additional training requirement should not be a barrier to switching, especially if it upskills staff in areas that will promote future growth.
Delivering training does not have to be arduous either, thanks to the growing number of e-learning courses from Access Legal and others that enable fee-earners to reach the standard set out by the regulator in a time-efficient and engaging way.
Third, firms should understand the potential risks of switching regulators, specifically, whether it is within their risk appetite and what could be done to prevent any issues emerging.
In other words, it is critical that you research each regulator in detail, and conduct your own risk assessment, in order to make an informed decision.
As well as the targeted training for staff mentioned above, your legal technology should allow you to manage all your compliance activities in one place, even as you move to a new regulator, ensuring complete visibility and auditability across your firm and confidence in meeting compliance requirements.