Gani: 10 minutes to address AGM
The newly formed SME & Boutique Law Firm Alliance will have the chance to call for a vote of no confidence in the Solicitors Regulation Authority (SRA) at next month’s Law Society annual general meeting.
Co-founder Jade Gani said she has been given 10 minutes to speak at the meeting on 14 October, after which she would ask the president of the Law Society to table the vote of no confidence.
Any such vote would be symbolic but nonetheless ratchet up pressure on the SRA to amend its approach to new rules which, from January, will separate law firm managers who can “unilaterally” make decisions from compliance officer roles in all but the smallest firms.
After a consultation launched just before last Christmas, the SRA raised the maximum amount of client money law firms can hold to be exempt from the rule changes from £500,000 to £2m, but the annual turnover threshold for firms remained at £600,000.
Though the changes were then approved by the Legal Services Board, the issue blew up earlier this month and the alliance was formed.
Ms Gani said she challenged SRA executives at a meeting earlier this month over whether there was any evidence to justify the £600,000 threshold and they could not provide any, saying only that they had used the same limit elsewhere.
“We are not arguing for less regulation, we are arguing for evidence-based, proportionate regulation,” she said.
Though this was the “trigger” for the action, she added, there were other concerns about the regulator, including its failure to take advantage of “multiple opportunities” to act earlier on the failed PM Law Group. The alliance believed the regulator had “failed the profession”, she said.
Ms Gani said over 160 lawyers from 125 firms had signed its open letter to the SRA calling for a raft of changes to the compliance officer regime and asking for implementation to be suspended.
As well as criticising the new rules, the letter gave a number of positive suggestions for how regulation could be improved, for example by requiring firms to submit their client account reconciliation data.
Although law firms are required to keep records of the client account reconciliations they complete every five weeks, “nothing is done with them”.
Ms Gani said the next step would be a joint meeting between the alliance and both the Law Society and Legal Services Board, which could happen next week.
Separately, the AGM is to vote on whether the Law Society president’s pay for the year should no longer be capped at the annual salary of a district judge, which is currently £144,350. The vice-president’s compensation is 50% of this and the deputy vice-president’s 25%.
The official notice of the AGM explained: “This would permit democratically elected council members to have flexibility for making future adjustments to the levels of compensation payable to office holders that appropriately reflect the scope and purpose of their roles and duties – not only as ambassadors representing and promoting both the Law Society and the solicitor profession in England and Wales, but also their governance responsibilities including membership of the Law Society board and various committees.”
A Law Society spokeswoman added: “The role of president is a significant leadership position with substantial responsibilities. Following a review, the Law Society council has concluded that it is appropriate to update the bye-law on office holder remuneration.
“The proposed change does not set a new level of remuneration, nor does it guarantee any increase. The amendment simply allows council to determine compensation through the Law Society’s established governance processes and taking account of the demands of the role.”
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