When it comes to processes and formal audits, the natural tendency for anyone is to put off analysing and understanding what you do and don’t do, until you really have to. That’s the point of deadlines, right? Well, compliance controls are designed so that they are a permanent part of operating culture, not just when you stand by your beds for inspection. This is certainly the case for the requirements under the SRA Handbook revision and cannot be taken lightly.

We kind of all knew it anyway, but just how much money a large insurance company like the Direct Line Group makes from referral fees still took my breath away. As we reported earlier this week, the group received £110m from solicitors in the three and a half years since January 2009. Call it £30m a year and extrapolate (the group’s market share is 19% of motor and 18% of home insurance) and you are looking at around £150m a year going from the pockets of solicitors to insurance companies for the privilege of receiving cases. And that’s before the £100m or so insurers make every year from credit hire referral fees.

The introduction of the new SRA Handbook on 6 October 2011, and the creation of compliance officers, was the first tangible wave of a further tightening of audit and control procedures among law firms. The regime seeks to create a framework for solicitors to adopt risk management and control processes that should, frankly, already be well established for the majority. It’s pleasing no doubt that the vast majority therefore complied and registered nominated solicitors and finance directors to pick up the compliance officer chalice. Yet, a staggering 800 had not registered on expiry of the deadline – do these really believe that the regime will not flex its muscles and that by ignoring this, they will remain hidden?

We all know the headlines: small firms under pressure; reforms beginning to bite; professional indemnity insurance becoming more uncertain; takeovers and mergers on the cards as consolidation sees big firms getting bigger, smaller firms getting knocked out. Then there’s conveyancing and other commoditised services being bundled and provided by big players, which is threatening smaller firms; or the likely polarisation of services in the changing market, with law firms focused on specialisation to get economies of scale. So you know exactly what I’m talking about. And you know where you are – in the UK in the year 2000…

The Legal Services Board’s call last week for an “open debate” on the cost of regulation will not have gone down a storm at Chancery Lane, I’d wager. The part of the practising fees most under threat from such a conversation is surely the 24% that goes to the Law Society for work that is essentially representative in nature but seen as being sufficiently in the public interest for solicitors to fund via compulsory levy. For now, anyway.