SRA takes too long to approve applications, ABSs say


SRA

SRA: under fire for delays and “bureaucratic” staff

Firms applying for alternative business structure (ABS) status believe the Solicitors Regulation Authority (SRA) takes too long to approve applications and its staff are too “bureaucratic”, according to the regulator’s own research.

Only 12% of firms said their application had been handled in a “timely manner”, while more than half described the SRA staff dealing with them as “bureaucratic”.

A further, in-depth, report on six successful and two unsuccessful applicants uncovered claims of an “information vacuum” at the SRA, firms being asked to “drop everything” to respond to enquiries and “an impression of disorganisation”.

Researchers carried out an online survey of 41 ABSs and five firms which had unsuccessfully applied for ABS status, meaning that “most firms had experienced the initial licensing process and not the revised application process and forms rolled out in spring 2013”.

The SRA’s ABS work has been under close scrutiny from the Legal Services Board, and it emerged last week that the SRA has cut the ABS backlog and waiting times significantly.

Almost all applicants (93%) surveyed by the SRA said staff were professional to deal with, but only 56% found that they communicated effectively.

Fewer than half (43%) said it was clear why information was being requested and how it would be used. An even smaller number (39%) found the SRA website and online resources clear and useful.

Two-thirds said the licence application process did not enhance their knowledge of risk management, though 5% said it did significantly. A small minority (15%) paid for external help with their license application.

The in-depth report based on interviews with eight of the survey firms, by ICF GHK consultants, included complaints that “information was not passed between SRA staff” or, when first engaging with the authorisation team, “they didn’t know who we were”.

Common complaints included disproportionate information demands from firms which felt they were “known to the SRA or had a simple ABS model”, meaning they could have “somehow” benefited from an expedited process.

Section 13 of the Legal Services Act, which requires non-lawyers with significant interests in ABS firms to be approved, raised “significant challenges” for firms.

These included the need for the equivalent of CRB checks on foreign individuals who wanted to invest, problems with investments from firms operating through fund managers, and a lack of clarity on how investors’ history would be interpreted by the SRA.

One firm reported that apparent confusion by the regulator on the scope of the section 13 process resulted in over 50 declarations sought from individuals being negotiated down to 20.

“It was mentioned by several firms that schedule 13 requirements were the main barrier to the ABS process operating as an effective means of opening up the legal services market.”

However, there were no examples of investors refusing to comply or withdrawing as a result of the process.

 

Tags:




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


The hot graphic design trends in the legal sector

As we recover from an unprecedented 19 months within our sector, marketing teams and clerks’ rooms are keener than ever to try out something new in the promotion of their businesses.


What challenges will the Bar face in the next five years?

As we look towards the end of 2021 and at how the Bar has adapted to the harsh realities of the pandemic, the question beckons as to what the future holds.


The rise of cyber-criminal threat for law firms since Covid-19

The global coronavirus pandemic, and the rise in people working from home, has unfortunately provoked a growth in cyber-crime. The UK government estimates that the cost of cyber-crime is £27bn per annum.


Loading animation