Law Society: Not seeking special protection for SME firms
Funding for solicitor apprenticeships at SME law firms should be available regardless of age to help tackle the recruitment problems many are facing, the Law Society has argued.
It also said the government’s interest on lawyers’ client accounts (ILCA) scheme should be dropped, and the Solicitors Regulation Authority (SRA) should publish small firm impact assessments before implementing any changes to the client account rules.
Publication of its Small Firm Manifesto comes the month after the SME & Boutique Law Firm Alliance was established independently of the national body.
The society said that, according to research it commissioned, 85% of small firms saw recruitment as their biggest challenge.
The government decided last year to limit the funding for Level 7 apprenticeships, such as those for solicitors, to people aged from 16 to 21. This was subsequently increased in the November budget to 25 for those doing apprenticeships at SMEs.
The manifesto called on government to make SME apprenticeships available to anyone, regardless of age, along with a promotional campaign including “practical employer guidance” on their responsibilities regarding the Solicitors Qualifying Exam (SQE).
The society said the transition to the SQE had created “new complexity for small firm employers”, with some firms raising concerns about “the lack of clarity around employers’ responsibilities when taking on a candidate who had not yet completed their SQE assessments”.
In the interim, government should work with Skills England to explore whether the new growth and skills levy short-course units could be expanded to include SQE preparation modules.
Further, it should commission Skills England, in partnership with the Law Society, to produce a regional legal workforce analysis and pilot regional legal training consortia in at least three locations within 12 months.
These consortia should “pool training resources, coordinate shared trainee pathways, and create structured local talent pipelines for small firms”.
The society called on the government to drop its proposed ILCA scheme given the likely impact on small firms, and on the SRA to conduct and publish small firm impact assessments “before implementing any changes to client account requirements, and apply the principle of proportionality in the design of any resulting obligations”.
The manifesto argued for other regulatory changes to help small law firms, such as audit reform, “including developing an approved list of auditors with legal sector expertise and simplifying audit requirements for firms below defined size thresholds”.
The government should confirm explicitly that small law firms fall within the scope of forthcoming late payment primary legislation and “enforce existing 30-day public sector payment obligations in professional services supply chains”.
With small firms consistently reporting that the barriers to adopting legal technology were as much about knowledge and confidence as cost, adapting existing SME technology adoption programmes for the legal sector would provide independent technology assessments, support and “targeted financial assistance for essential legal technology tools”.
Small professional services firms should benefit from “an enhanced tax deduction for expenditure on approved software, cloud services and AI-enabled tools used in service delivery and compliance”.
Meanwhile, the SRA should “expand its existing AI resources to provide clear, practical standards on professional responsibility, supervision, confidentiality, copyright, liability and data protection, giving small firms the regulatory certainty they need to adopt AI tools safely”.
On access to justice, the society called on the government to fund a community legal hub pilot programme in five locations, “prioritising areas identified as legal advice deserts”.
These would provide “shared infrastructure for sole practitioners and small firms, co-located with wider community services to strengthen local access to justice”.
The report concluded: “Small law firms and sole practitioners are not a special interest group seeking protection from the market.
“They are a public good, the delivery mechanism for legal services in communities across England and Wales, the primary means by which individuals and businesses access justice and professional advice, and a vital component of the regional economic and social infrastructure of this country.”
The society commissioned qualitative research from YouGov, which carried out 20 in-depth interviews with SME law firms, and combined it with an economic analysis by the Centre for Economics and Business Research, and its own focus group research to provide an evidence base for the manifesto.
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