Understanding the cost of regulation

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toupee uk

In a guest blog, Chris Handford – head of research and development at the Legal Services Board – explains the reasons behind the board’s new research survey on the costs of regulation – and how practitioners can have their say

Legal Futures has reported in recent months on the range of new faces at the helm of both the frontline regulators and the Legal Services Board (LSB) itself. But while the personnel may be changing, the direction of travel is still firmly set towards a more competitive, strongly independent and diverse legal services sector, which at its heart promotes the interests of consumers.

At this time of wider change in the sector, it’s also a good opportunity to reflect on the regulatory landscape itself. As part of its ongoing policy programme, the LSB is launching a significant project to explore what we are calling the ‘cost of regulation’. Research will be a significant component of this project.

When complete, the outputs of this project will help everyone involved in the legal services sector, including the LSB and the approved regulators, to better understand the costs associated with legal services regulation – and its impact on the regulated community. A better evidence base for the impact of these costs will help to ensure that regulation is proportionate, targeted, and effective.

We have, over the years, received a number of complaints that regulation of legal services is unnecessarily expensive. In addition to more readily visible and immediate costs, such as practising certificate fees, the costs associated with regulation include, of course, the resource costs associated with day-to-day compliance.

In carrying out this research, the LSB wants to establish a better idea of both the costs of regulation faced by legal services providers and the costs of the regulators themselves, not forgetting the LSB.

In relation to the costs faced by legal services providers, the project will gather data using a mixture of surveys and interviews with regulated legal services providers to enable a high-level exploration of these costs, identify any common areas where providers may be able to reduce their compliance costs, and gather evidence to inform future work by policy makers and regulators alike.

Good regulation means making sure that, when businesses and practitioners are asked to spend their valuable time and resources on regulatory compliance, there is strong evidence that the regulation is effective and proportionate in protecting consumers, businesses and employees.

It might be the case that some regulation is unnecessary, over-complicated, or out-of-date. Several years ago, seeking to understand the reality of regulatory compliance for those working in the legal services sector, the LSB undertook an information review to look for any existing research on the cost of regulation of legal services. We found very little in the way of solid evidence on the issue.

As a consequence, the cost of regulation research which the LSB is now launching is intended to make a start in rectifying that situation.

In order for the results of the project to be as useful as possible, it’s incredibly important that the research team is able to obtain as much information as possible from legal services practitioners, and for that reason we’re giving the regulated community a direct line to the LSB in the form of a survey.

This is a chance for practitioners in all areas of regulated legal services work to have their say on the direct and indirect costs of regulation which they encounter, together with providing any feedback they may have on the wider impact of regulation on their daily business. It doesn’t matter who you’re regulated by, the size of your firm, the area of law which you practise, or what type of clients you serve – if you are a member of the regulated community in the legal services sector, we want to hear from you.

The survey, which you can find here and which should take around 20 minutes to complete, marks the first stage in a milestone research project for the sector. Further information on the project can also be found on this webpage.

We hope that legal services practitioners, whose support is critical at this early stage in helping us to pin down the details of unnecessary regulatory burdens, will be able to find the time to participate, and we are looking forward to sharing our findings with the wider regulated community.


    Readers Comments

  • Sat on the Sidelines says:

    Will this include the regulatory cost of mandatory PII ? No doubt the biggest barrier that is detrimental to the consumer demanding choice and independence.

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