The Law Society is set to reduce the cost of practising by around 20%, even though its budget is going up in 2014/15.
Across the Law Society (in its representative guise), Solicitors Regulation Authority and shared services division, the net funding requirement for the next financial year is £116.7m, a 3.7% increase on this year’s budget.
Shared services, called Corporate Solutions, will receive the most (£57m), followed by the SRA (£30.8m) and then the Law Society (£15.6m).
However, only £104.9m of this will be paid for through practising fees, a 10% fall on last year. The rest is made up of underspends on the 2013/14 budget, depreciation, and a £4m deficit on activities that legally the society cannot recoup through practising fees and so will have to dip into reserves to fund.
This is being translated into a proposed cut in individual practising certificate fees from £384 to £320. When combined with the planned reduction in contributions to the Solicitors Compensation Fund – from £56 to £32 – the overall £88 reduction amounts to 20% on last year.
Some 60% of the funding requirement is satisfied by firm-based fees, and these are falling by 16% for all but the very smallest firms, where the reduction is smaller. For the very largest firms, with £1bn turnovers, this still means a fee of around £1m.
In all, the top 250 practices will contribute £30.2m in firm fees alone, before their spend on practising certificates is taken into account. Clifford Chance, for example, is listed by the Law Society as having 1,020 solicitors on its books, which will amount to another £326,400 in individual fees.
Each firm is also set to pay £548 for the compensation fund – 34% less than last year.
Among the interesting details in the papers submitted to next month’s Law Society council meeting – at which the figures will be signed off, subject to the approval of the Legal Services Board – are that the society is planning to develop its ‘Find a Solicitor’ website to enable client feedback.
The society’s commercial affairs arm is expecting a £2.1m fall in income to £14.5m in the coming year.
The society is to spend £3.7m on capital works on its London properties – the Chancery Lane headquarters and the Carey Street building around the corner, which is in part used as the president’s residence when in London.
The three-year rent free period enjoyed by the SRA for its headquarters at the Cube in Birmingham comes to an end in March 2015.