Law Society looks to boost income by £8.4m through PC fee rises

Law Society: Now is the time for us to be more strategic

The Law Society is planning to increase the cost of practising to boost its income by £8.4m over the next three years as it bids to make itself “indispensable” to members.

The practising certificate fee (PCF) has either fallen or stayed the same for the last nine years but the current £266 would increase to £287.50 by 2024/25 under plans put out for consultation on Friday.

The Law Society has not said what will happen to firm fees, which make up 60% of the money generated by practising fees.

It would also seek to take a greater share of the money – by 15% this year and then 7% and 5% in the following two years – taking it from £28.5m in the current year to £36.9m in 2024/25.

Practising fees, which raised £104.3m in the current year, largely to pay for the work of the Solicitors Regulation Authority and other parts of the regulatory structure – the Legal Services Board, Legal Ombudsman, Solicitors Disciplinary Tribunal and Office for Professional Body Anti-Money Laundering Supervision.

However, the Legal Services Act 2007 allows the Law Society in its representative guise also to use them for ‘permitted purposes’ – certain prescribed non-regulatory activities, such as law reform. But its proportion of the overall take has fallen in recent years.

It has to fund activities not covered by permitted purposes from other income and has an overall budget of around £45m.

Solicitors do not have to be members of the Law Society to practise but are obliged to pay for it.

Putting its case, the society said: “We know an increase isn’t desirable. However, we are encouraged by the resilience of the legal sector through the pandemic, with the largest 200 firms reporting record levels of turnover in 2021, up £2bn from 2019.

“Although this hasn’t been the same story for SMEs, they are also showing signs of recovery and we believe by Q3 2022 they will be back to pre-pandemic levels of turnover.”

According to the society, those who responded to its consultation on the fee last year said “more could be done with an increase in our level of income”, and that it should be “appropriately funded” to play its role in society.

However, the results do not totally bear this out. The Law Society did not formally publish the outcome of the consultation, but a summary was included in its application to the Legal Services Board to approve the fees.

This reported that most members (53%) felt the society should keep the amount of money it received from the PC fee the same at £28.5m; 14% said it should seek more and 18% less.

In 2020, it reduced its share of practising fee income by £3m to £28.5m – which was covered by reserves – because of the impact of the pandemic on the profession.

“In addition to the PC fee reduction, we also provided training and webinars at a reduced price or without charge. Maintaining this level of support to assist members has depleted our reserves and continuing to do so is unrealistic.”

The society said that, had inflation been applied to the PCF since 2016, its income would have been £36.1m this year.

It added that “now is the time for us to be more strategic as we prepare to launch our new corporate plan. We now call on you to support us”.

Chancery Lane pledged to launch a long-term programme to “reframe” and promote the social, political and economic value of the rule of law and justice system.

“We know public perceptions on ‘big issues’ can be influenced and change once they understand its value. Nothing short of a major public programme led by the Law Society will shift the status quo.

“This strategic communications programme will be coupled with a major campaign to create a vision for a 21st century justice system.”

Among the outcomes listed in its new corporate plan include that members feel “they belong to the Law Society as part of their professional community and identity”, and that it is “indispensable to the fulfilment of their professional goals and high-quality legal services”.

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