Bunn: Fixed fees for complex work
A private client firm in Norwich has become the first to transfer regulator from CILEX Regulation (CR) to the Solicitors Regulation Authority (SRA).
Louise Bunn, director of LB Wills & Probate, said she was aware of five more CILEX firms that had applied to be licensed as alternative business structures (ABSs) by the SRA, one of which could be licensed next month.
Despite the move, she was strongly opposed to a plan by the Chartered Institute of Legal Executives (CILEX) to abolish CR and move the regulation of members and firms to the SRA.
Ms Bunn said the main reason for her decision to change was an email from CR in April about a consultation on whether CILEX firms should switch their client accounts to third-party managed accounts (TPMAs).
The impact of this would be an “untenable” increase in the cost of her firm’s banking from £168 per year to £6,000. She anticipated other problems, such as the TPMA provider refusing to take cheques.
The idea was proposed in the wake of CR failing to find an indemnity insurer to back its compensation fund last year, meaning that the fund had to be self-financed. The consultation argued that a TPMA would remove the need “for a large cash, or insurance-backed compensation fund”.
The idea has now been dropped but Ms Bunn decided to make the move with her reauthorisation looming on 1 August.
She set up LB Wills & Probate in August 2019, having worked for a number of solicitors’ firms.
One reason for her dissatisfaction with working for law firms was having to be supervised by a solicitor even when, at her previous firm, she was head of private client.
Ms Bunn said LB Wills & Probate offered clients fixed fees not just for simple wills and powers of attorney, but for more complex wills and estate administration, calculating the fees according to the number of assets and beneficiaries and reserving the right to charge more in exceptional cases.
Earlier this year, she recruited a part-time solicitor who was able to do work in the Court of Protection. Despite being a fellow of CILEX, Ms Bunn said she had no practice rights to carry out that work.
She said there were other issues faced by CILEX firms, such as the difficulty in finding an indemnity insurer given the small number of CILEX firms, of which there are fewer than 30.
Another was the refusal of some financial institutions to make payments from estates to firms not regulated by the SRA.
Ms Bunn said: “I had my own reasons for leaving, but, apart from the incident with TPMAs, my experience of CILEX Regulation has been very good.”
She said she was opposed to moving to a regulator with ‘solicitor’ in the title. “We should be showing how great CILEX is and how we are specialists in our fields.”
A CILEX Regulation spokeswoman said: “Following the withdrawal of our insurer, the underwriter of the CILEX compensation fund, and the wider challenges in the insurance market, CILEx Regulation consulted on replacing holding client money with the use of TPMAs earlier this year.
“As a result of extensive engagement with our firms, it became clear that the solution provided by the TPMA was unworkable and we are intending to retain the current interim arrangements for compensation, whilst we explore further alternative measures to ensure a feasible outcome.
“These proposals form part of a wider review of our regulatory arrangements which we announced in our new strategy last year, and on which we plan to consult widely in the coming weeks.”
She added that recognition of non-SRA regulated firms by financial institutions was an issue affecting “a number of fellow legal regulators”.
“Some, but not enough, progress has been made, thanks to our and others’ efforts but much more is needed. CILEX Regulation is therefore working with the wider sector and financial bodies to find a way forward.”
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