Posted by Neil Rose, Editor, Legal Futures
It is not a massive exaggeration to say that the Law Society will be fighting for its existence in the months to come. The government’s intention to make the Solicitors Regulation Authority (SRA) entirely independent from the society will inevitably raise the question of whether what will then be purely a representative body should still be able to take a slice of the fees that solicitors pay for regulation.
This issue applies also to all the other parts of the regulated legal profession – except for licensed conveyancers and notaries, whose regulators are already completely separate – but as by far the biggest and, dare I suggest, least popular of the representative bodies out there, I intend to concentrate on what this means for the Law Society.
The Law Society (and Bar Council, Chartered Institute of Legal Executives etc) are named in the Legal Services Act 2007 as the approved regulators of their parts of the profession. The society has delegated its regulatory responsibilities to the SRA, but remains ultimately responsible for regulating solicitors. The SRA is operationally independent, but not structurally – it remains part of the Law Society ‘group’.
As such, on behalf of the group, the Law Society levies the cost of SRA regulation through practising fees which have to be approved by the Law Society council and ultimately the Legal Services Board. However, under section 51 of the Act, the society is also able to recoup the cost of so-called ‘permitted purposes’, activities that are not regulatory but are seen as being in the public interest, such as advice to solicitors on practice management and law reform work. See the full scope in section 51(4) here.
Of the £105.8m raised from practising fees in 2015/16, £54.1m went to the SRA and £35.3m to the Law Society under section 51 (the rest went on the levies for the Legal Services Board, Legal Ombudsman and Solicitors Disciplinary Tribunal). Despite its commercial activities, this is overwhelmingly Chancery Lane’s main source of income. The SRA says this amounts to around £250 per solicitor, a figure the society disputes.
It is a little-known fact that you don’t have to be a member of the Law Society to be a solicitor, but either way you still have to pay for it.
However, if the SRA achieves full independence and becomes the approved regulator, it is widely agreed that section 51 will have to be revisited. It is thought that the law is the only profession whose representative bodies are funded in this way and certainly if you look at wider trade union reform, compulsory levies have been consigned to history.
If this happened, then solicitors would for the first time be given a choice of whether they wanted to pay for the upkeep of their representative body (whether this is an opt-in or opt-out will be an interesting question down the track).
A fun parlour game is to guess how many of the current 130,000 practising solicitors would choose to do so. Nobody predicts a high number – the City law firms, for example, are likely to pick up their ball and focus their efforts on the City of London Law Society. Personal injury lawyers may think they are better off having the Association of Personal Injury Lawyers speak for them, and so on.
Of course, the fewer solicitors who did sign up, the more they would have to pay. The society would no doubt start offering corporate membership so that firms, rather than individuals, pay up, but it comes back to this question: What has the Law Society ever done for me?
Unfortunately, unlike the Romans, they did not build the aqueducts, although to judge by the self-congratulatory tone of many of the Law Society committee papers I read – talking of various successes, positive press coverage, and a good reputation with parliamentarians – this may come as a surprise to some at Chancery Lane.
In fact, rather than proving its worth to its members, the Law Society has recently only been doing the opposite.
Take Veyo, the embarrassing, failed conveyancing IT project that has cost the profession £7m. Let’s just pause a moment on that figure – £7m. More than many law firms earn in a year.
Aside from an apology, there has been no accountability, no shake-up to prevent such a disaster recurring. A hundred members of the Law Society’s council and not a peep from any of them. It’s only apathy among solicitors that is letting the society get away with this.
Then there is its role in representing solicitors. Last month, when the latest row about SRA independence erupted, the Law Society hit out stridently at the SRA, suggesting it was seeking to undermine Chancery Lane. It was strong, punchy stuff.
The following day, Prime Minister David Cameron attacked claimant solicitors for creating “an industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq”. There was blanket media coverage. So, did the Law Society hit back with the same kind of verve with which it defended itself 24 hours earlier? Sadly not.
Around seven hours after Mr Cameron had made headlines with his comments, the society put out this statement – far too slow a reaction in modern news cycles but who would have covered it anyway? To call it mealy mouthed would be a compliment.
Where was the fight on behalf of its members and, indeed, the rule of law? On that day, the Law Society failed both.
(Similarly, at 5pm of the Monday of that week, the Insurance Fraud Taskforce issued its report that placed plenty of blame at the feet of solicitors. The Law Society did not send its reaction until 1.50pm on the Thursday.)
It is possible that the society was hesitant about hitting back at Mr Cameron for fear of upsetting the negotiations that were going on over criminal legal aid contracts, which were scrapped the following week to widespread delight.
The society shares the credit for this – its head of legal aid, Richard Miller, and others have worked tirelessly on the profession’s behalf – but the Justice Alliance, Criminal Law Solicitors Association and London Criminal Courts Solicitors Association take more of it. They have been more vocal and aggressive in taking the fight to the government, and this has prevailed, albeit I imagine with the quiet support of the society.
Indeed, it is important to note that the society, and in particular its specialist committees, do a lot of quiet and effective work on behalf of the profession on detailed issues of law and practice. But few will see this as enough of a reason to fork out £250.
One of the reasons it did not call on legal aid solicitors to head for the barricades was a fear of breaking the law. Just last year, then president Andrew Caplen explained: “It is the longstanding position of the society that it cannot support, organise or lead collective action. The society is not a trade union and it cannot call its members out on strike or encourage them to take collective action. It would be unlawful under the Competition Act for us to call for, organise or lead collective action.”
This sounds like an awfully good reason for the Law Society to become a trade union – the kind of bold leadership shown of late by the British Medical Association on behalf of junior doctors is, I wager, what solicitors would like to see. But even if it could, I’m not sure that culturally it would be able to take such a step.
The recently published strategy overseen by chief executive Catherine Dixon promises that the society will promote, support and represent solicitors. This begs the question of what it’s been doing up until now – I say that facetiously, but many solicitors will consider it a serious question. How many other organisations with 160,000 members (if you include in-house lawyers and non-practising members) cannot drum up enough interest from a few hundred of them to hold an annual conference (there hasn’t been one for a decade or so)?
Yet getting anything done at Chancery Lane, from my experience of working there until 2008, is far from easy. It is a stifling bureaucracy (from what I can gather it hasn’t changed much since my time) with a council sitting at the top that, from the outside, seems to do precious little at not inconsiderable cost.
The Law Society has to change and become a body of which solicitors actually want to be members. There is much it could do for the benefit of both the profession and the public, and now is the time to do it, and be seen to do it. It needs to be bolder, more decisive and faster to act.
I’m not holding out my hopes, however. But acting after the section 51 meteor has hit Chancery Lane will be too late.