Guest post by Santosh Pandey, a solicitor and the founder of Western Legal
Pandey: A remedy in search of proof
I am a solicitor going through authorisation with the Solicitors Regulation Authority (SRA) for my own practice. The Law Society AGM on 14 October spent 90 minutes on whether the profession should hold a vote of no-confidence in the SRA board. That argument will run on.
For a practice like mine, the more pressing question is what replaces the compliance officer rule now that the SRA has paused it.
Under the rules the Legal Services Board approved on 31 July 2026, a sole owner manager whose turnover exceeds £600,000 may hold neither the COLP nor COFA role, and one below that figure whose client money passes £2m may be COLP but not COFA. Implementation was due to begin in January 2027. At the end of September, the SRA paused the plan to take stock and talk to the profession.
The Law Society’s new president, Brett Dixon, told the AGM that it would keep pressing the SRA for a clear timetable and for recognition that the current proposals need to change.
For a sole practice, £600,000 of turnover is not a measure of risk. It is a ceiling on growth. A sole practitioner who builds a sound practice is told that the reward for passing that figure is a compliance appointment the practice must fund from its margin, filled by someone who will know its finances less well than the owner does.
The rule moves the person with the deepest knowledge of the books out of the role designed to watch them.
The evidence behind the rule has never matched its reach. The SRA estimated that around 1,660 firms and 431 sole owner manager firms may need to act, and the Legal Services Board’s decision notice records that the SRA itself recognised it had limited information on firms’ governance arrangements to substantiate that estimate.
The same notice puts around 4,100 firms, roughly 45% of the sector, within the eligibility criteria at a £600,000 threshold.
In its earlier consultation, around 40% of respondents agreed with the proposal. Jade Gani of the SME & Boutique Law Firm Alliance has said that when she asked SRA executives for the evidence behind the £600,000 figure, they could point only to its use elsewhere.
The Conveyancing Task Force has asked the question that matters most: in the collapses that prompted this, were the problems found by compliance officers, or did they come to light through accountants, whistleblowers, banks and clients? Until the SRA answers that, separation of roles is a remedy in search of proof.
There are better answers available. A threshold for sole practices could track the client money actually held rather than turnover, since client money is where the harm lies.
Where a sole owner cannot hold the COFA role, the rules could allow an independent accountant to take it, an option others in the profession have already proposed. Either would protect clients without penalising growth.
The SRA has told the Alliance it will consider contacting affected groups directly in future consultations. The redesign is the place to start, with the 431.
The other proposals now in play follow the same pattern. The Legal Ombudsman has consulted on case fees of £200 at early resolution, £750 after investigation and £1,500 where an ombudsman decides, with a further £400 where a firm gave no final response within eight weeks. A firm escapes the fee only if the complaint is resolved in its favour and the ombudsman is satisfied it took all reasonable steps at the first tier.
For a sole practitioner that turns every complaint into a wager. Mark Evans warned, while Law Society president, that firms may settle complaints regardless of merit simply because it is cheaper. A waiver that arrives only at the end of an investigation does nothing to remove that pressure. The fee should attach to complaints that are upheld, not to complaints that are made.
The Civil Justice Council has proposed that smaller disputes over solicitors’ bills move to the Legal Ombudsman. Today, section 70(9) of the Solicitors Act 1974 makes the client pay the costs of an assessment unless the bill is reduced by one fifth. If bills move to the ombudsman, that filter, or something equivalent, must move with them, or every modest bill becomes a free option to challenge.
And the Ministry of Justice wants 75% of the interest on pooled client accounts and 50% on individual ones, yet when a minister was asked in Parliament whether the money would be earmarked for access to justice, the answer pointed to legal aid and court priorities and gave no commitment to ringfence it.
The AGM showed how strongly small firms feel. Sole practitioners are not asking for lighter regulation. We are asking for regulation built on evidence, with rules that let a well-run practice grow. The pause shows the SRA can listen. What it builds next will show whether it has heard.
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