Ethics: SRA should not be overly prescriptive
Plans by the Solicitors Regulation Authority (SRA) to introduce compulsory three-hour ethics discussions for solicitors could cost the profession £100m, Birmingham Law Society (BLS) has calculated.
The national Law Society also warned about the cost, saying one large law firm had valued lost productivity from the annual group discussions at £1.2m.
BLS said the “overly prescriptive” proposals would come at “enormous cost” and “any measures to improve professional standards must be proportionate, flexible and effective”.
Mark Evans, president of the Law Society, described the proposal as “unworkable, costly and unduly prescriptive”.
The SRA launched proposals for a beefed-up continuing competence regime in April, arguing that many solicitors failed to demonstrate that they engaged in regular learning and development on ethics.
Both responses supported requiring solicitors to record their learning and development needs and how they identified and addressed them, and keep that record for at least three years.
They also agreed with the idea of compulsory ethics training, and were not against annual participation in group discussions.
However, BLS said the cost implications of the proposals, both for the profession and the SRA itself, were “conspicuous by their absence and should be calculated and considered carefully”.
The society estimated the “direct facilitation cost” of three-hour training sessions for groups of 12 solicitors at £4.5m across the profession, without taking into account the preparation, administration, room hire or associated costs.
The “opportunity cost” of three hours of lost fee-earning time, “at an assumed hourly rate of only £150”, was “substantially higher” at £80m across the profession.
The regulatory cost to the SRA in monitoring compliance, developing content and ensuring it remained relevant could bring the total to £100m.
The national Law Society said one large law firm had estimated lost productivity from the three-hour annual meetings at £1.2m, while another put the combined cost, with training and travel, at £2.1m.
BLS disagreed with the specific requirements for ethics discussions proposed by the SRA – that they should run for three hours, be facilitated by a solicitor, that facilitators should select topics for discussion and keep records of participants, that discussions should involve between three and 12 participants and topics should be chosen from an SRA list.
It argued that the SRA should not be prescriptive about how ethical discussions were structured or facilitated.
“The nature and delivery of ethical training will vary widely depending on the nature of the services being provided by each firm, the size and scale of the organisation, the firm’s client base and the knowledge and experience of the professionals providing the services.”
The Law Society agreed with BLS that the facilitator should not need to be a solicitor, that group sizes should not be fixed to between three and 12, and the content of sessions was more important than “an arbitrary timescale”.
The SRA also proposed that, where the regulator had competence concerns, it should have the power to require solicitors and non-solicitors in a law firm to complete specific learning and development within a particular time.
BLS said it “strongly opposed” this. “While we recognise the SRA’s intention to address competence concerns, we do not consider that introducing a rule to mandate specific learning and development in individual cases is a proportionate or practical approach.”
The Law Society said it needed to “understand more about the possible triggers for such action from the SRA before supporting the proposal entirely”.
BLS added: “We think that these proposals will have a significant impact on smaller firms. The SRA’s own data shows that those from ethnic minority backgrounds are more likely to work in smaller law firms and so will be disproportionately affected.”
Mr Evans commented: “While ongoing competence is an essential part of being a professional, with benefits that are to be encouraged, we disagree with the SRA’s blanket approach.
“The vast majority of solicitors are conscientious and up to date in their learning and development. The SRA must not impose such restrictive and costly requirements on the entire profession to address the failings of a minority of solicitors.”
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