The Legal Services Board has urged the Law Society and Solicitors Regulation Authority (SRA) to “actively look for savings opportunities” after the society’s budget increased by £11.5m for the next year.
It has also criticised “the inadequacy of the consultation undertaken with your fee payers on the proposed fees”.
Most of the increase in the £117m budget comes from the Law Society’s decision to increase its reserves by £10m. Writing to members in July, the society said this included cover for liabilities arising from the closure of the assigned risks pool, while it was “prudent to begin the rebuilding of reserves following a £20m net outflow from the society’s reserves last year to fund emergency expenditure for PC renewal, and the cost of financing the move of the SRA to new premises in Birmingham”.
Writing with the formal approval of this year’s practising fee levels – which are rising by around 12% – LSB chief executive Chris Kenny said: “While we recognise that there is a duty to act responsibly in relation to the financial position of the Law Society, we think that it is also important that the Law Society and SRA actively look for savings opportunities so as not to increase further the financial burden on regulated firms and individuals.”
While he acknowledged that the increase in practising fees would be offset to some extent by the reduction in contributions to the compensation fund, Mr Kenny said it was still significant and “our view is that this should have been subject to more extensive consultation”.
A Law Society spokesman said: “Consultation is delivered through the existing democratic structures of the society. This year, this was supplemented by a communication prior to the budget-setting meeting via local law societies, the society’s website and ‘Professional Update’, the society’s weekly e-bulletin to the whole profession.
“This shared details of the proposed budget and PC fee and invited members to share their views with their council representative prior to them being considered at council.”