Law Society: Some solicitors said PC fee was a bargain
Two-thirds of solicitors do not consider the practising certificate (PC) fee value for money, with many expressing concern at the level being charged given the impact of Covid-19.
The Law Society is seeking approval from the Legal Services Board for the PC fee staying at £278 for a fourth year, raising £40.5m, with firm fees bringing in a further £60.7m.
With commercial and other income, in all the Law Society budget for 2020/21 is £133.5m for its next financial year, £800,000 lower than the current year.
Though the society put out a consultation [1] on the fees in June, it has not published details of the response on its website; however, they are in the application to the LSB [2].
This showed that it received 224 responses – the most ever for these consultations – and only 24% said the PC fee represented good value for money, against 67% who said it did not (9% did not know).
Sole practitioners/self-employed solicitors, or those otherwise responsible for paying for their own PC, were particularly concerned about the cost, the society said, while “some members expressed the need for the fee to be more flexible to recognise changing circumstances (e.g. those who work part time or who are non-practising)”.
It went on: “Many respondents expressed concern at the levels of the PC fee based on the effects of lockdown on their practices and that some firms have been closed for three or more months.”
They said it should be reduced as a result, while some respondents argued the PC fee should be split into a mandatory part to cover “basic regulation” and a voluntary part for all other activities.
“Several respondents noted that both the SRA and Law Society have talked about cost savings and efficiencies but do not feel these are being passed on to members via reduction in the PC fees.”
Unlike its counterparts in Scotland or at the Bar [3], the Law Society Group – made up of the Law Society representative body and the Solicitors Regulation Authority (SRA) – has not offered any reductions or made any cuts in recognition of the difficulties Covid-19 has caused fee payers.
The society also said that “some people thought the fee is a bargain and should be higher reflecting on how much work is done and how the money is used”.
The consultation underscored that many solicitors remained confused about what the different organisations that receive money from the PC fee do.
In-house solicitors, solicitors working abroad and those practising as notaries felt they did not receive as many benefits as other segments of the profession.
The society added: “Some respondents feel that both the Law Society and SRA are unnecessarily bureaucratic and overstaffed; some feel that the Law Society does not do enough to support the profession and that the SRA over-regulates in a way which is excessively burdensome.”
The responses did not persuade the Law Society to amend the proposed fees.
Of the £101.2m coming from the profession, the SRA will receive £54.8m, up £700,000 on last year, while the Law Society will take £30.5m (down £1m) under the other ‘permitted purposes’ allowed under section 51 of the Legal Services Act 2007 [4].
These are activities that are not strictly regulatory in nature – such as law reform and “practical support” for practitioners – for which the Law Society can nonetheless levy the profession on a compulsory basis.
The rest of the practising fees will go to pay the levies imposed to help fund the Legal Services Board (£3.3m), Legal Ombudsman (£10.6m), Solicitors Disciplinary Tribunal (£3.2m) and Financial Conduct Authority (£800,000 for anti-money laundering purposes). The £17.9m total is up £1m on last year.
The Law Society spelled out in more detail than previous years what it is spending its part of the PC money on.
The catch-all ‘corporate strategy and performance’ is the main recipient (£17m), followed by £5.3m for ‘corporate and partnerships’, £3.7m for ‘member experience and services’, with the same sum going to the directorate of the chief executive officer, £2.9m on legal policy, £2.7m going to the in-house journal, the Gazette, £2.5m on public affairs, and £2.1m on brand and communications.
The society will find a further £2.8m to cover costs from these various departments which are not covered by section 51.