Regulation will cost solicitors 22% less this year, figures released by the Solicitors Regulation Authority (SRA) have revealed.
However, contributions to the compensation fund are set to soar – from £10 to £60 for individuals and £120 to £772 for firms.
In line with its commitment last year to reduce its call on the profession, the SRA is planning to collect £94.8m through practising fees levied on both firms and individual solicitors in 2011/12, compared to £121.7m this year.
Some savings will come from lower staff numbers, with the SRA having already announced plans to axe around 80 of the current 640 posts. A third of staff members have been put at risk of redundancy.
As first revealed on Legal Futures on Tuesday, the individual practising certificate fee is likely to drop 16.7%, from £428 to £350 – individual fees pay for 40% of the annual requirement.
Firms will see their fees falling further. Examples given by the SRA show that a firm with a turnover of £200,000 will pay a fee of £1,121, 24% less than last year; a firm with a turnover of £813,000 will enjoy a 25% fall to £3,941; and a firm with a £280m turnover will pay 22% less, £446,780.
The SRA figures show that 15 firms have a declared income of more than £150m, and between them they will pay £6.3m in fees. This equates to 11% of all firm fees, even though they account for just 0.001% of the 10,998 firms in England and Wales.
The 27 firms with a turnover between £70m and £150m will pay £6.1m, the same amount as the 6,308 firms with the lowest levels of turnover (up to £500,000).
SRA chief executive Antony Townsend said the increase in the compensation fund contributions had been flagged up last year. This year’s figures represent a return to more regular levels, he argued, after the SRA board decided last year to run down reserves that it considered to be too high.
The compensation fund reimburses the victims of fraud and dishonesty by solicitors.
The figures will be finalised in July and have to be approved by the Law Society council and then the Legal Services Board.
- The SRA is expected shortly to announce plans to move from its current offices in Redditch, with a satellite office in Leamington Spa, to a new single site in Birmingham.