A Law Society survey finding that a growing number of senior solicitors think outcomes-focused regulation (OFR) places too heavy a burden on firms has drawn a rapid rebuttal from the Solicitors Regulation Authority (SRA).
But the survey – part of the Law Society’s annual performance assessment of the SRA – was not all bad news for the authority; there was evidence that firms viewed enforcement under OFR as a credible deterrent to misconduct.
However, in a dramatic turnaround of perceptions of OFR – which came into force in October 2011 – while about two-thirds of firms in 2011 welcomed a shift towards OFR from the previous rules-based system, the survey found that “in 2012 two-thirds disagreed that the new approach was welcomed”.
The figure that moved the SRA’s chief executive, Antony Townsend, to step in to defend OFR was that 86% of senior lawyers believed it places too great a burden on law firms. This compared to 77% who held similar views on the previous regime a year earlier.
In terms of the cash outlay for regulation, the proportion of firms that considered the internal costs of compliance to be excessive had grown from 39% to 47% in 2012. Some 58% believed compliance costs were harmful to their business.
Fewer than two-fifths of firms considered the amount they were paying for the SRA’s brand of regulation to be value for money.
The latest Law Society survey took place over this winter and involved 1,001 firms, 712 of which were also polled in 2011, plus another 289 randomly selected firms. In February the SRA’s own OFR survey found confusion  about the new scheme was widespread, even among those charged with applying it.
Rejecting the foundation for this greater negativity, Mr Townsend said firms recognised the regulatory burden and costs of regulation were the result of “one-off costs and extra administration” and he believed complaints would “ease as OFR beds down, leading to a reduction in the burden for well-run firms”.
He added: “Nonetheless, we recognise the pressures upon firms, and we are committed to streamlining our processes and reducing costs wherever we can. Visible improvements have been made to both our approvals and authorisation processes and we shall continue to look at ways to simplify these further.”
Mr Townsend also drew attention to the SRA’s ongoing initiative to reduce red tape  in key areas, as evidence of the authority’s commitment to cutting back on unneccessary regulation.
The Law Society survey concluded: “Firms’ views on the SRA’s ability to meet its objectives under OFR were less positive in 2012 than in 2011 [and they] were less likely to give the SRA ‘good’ ratings in relation to their performance in setting standards of behaviour, promoting and securing standards, providing the right degree of protection for consumers and upholding the rule of law, than their counterparts in 2011”.
But it acknowledged that In 2012 more than two-thirds of firms agreed that the SRA’s enforcement procedure was understood by the industry as a credible deterrent and a similar proportion felt it was being used in a way that better protects consumers.