The Law Society is set to collect nearly £124 million from solicitors in the next year, a 13% fall on last year due to a major reduction in compensation fund contributions, it announced this week.
The society is to seek approval from its ruling council later this month for a total of £121.7 million to be collected from practising fees – a decrease of £0.5m on the figure collected in 2009/10. It said the reason for the decrease is primarily that “there was an over-collection last year, as a result of unduly cautious assumptions having been made about the timing of payment of the levies for implementation of the Legal Services Board and the Office for Legal Complaints, and the number of practising certificates to be taken out”.
This factor is largely counter balanced by the decision of the Solicitors Regulation Authority (SRA) board that some costs which were formerly borne by the compensation fund should in future be borne by the practising fee account.
Individual practising fees are likely to be just under £500, with the rest made up from the new firm fee.
The sum required for the compensation fund is expected to be £2.1 million, down from £20.9 million last year. That partly reflects the SRA decision about allocation of costs, and partly that the fund’s reserves are currently higher than is necessary.
The society said that the budget also “reflects continued stringent action to contain costs throughout all parts of the Law Society group. In particular, staff salaries, which are the largest item of expenditure throughout the Law Society group, have been frozen since January 2009”.
Once signed off by the council, the proposals need the approval of the Legal Services Board before they come into effect.
Although budgets for the Law Society Group in 2011 are not set until later in the year, it is anticipated at present that the practising fee income will be applied broadly as follows:
Solicitors Regulation Authority – £69.6 million.
The Law Society (professional body) – £31 million.
The Legal Complaints Service – £6.5 million.
Statutory levies (Legal Services Board, Office for Legal Complaints, Solicitors Disciplinary Tribunal) – £14.6 million.
Earlier this week, Legal Futures revealed that the Law Society has acceded to the SRA’s request for a £22 million investment in a new IT system (see story).
The Law Society is seeking solicitors’ views on its budget plans by 12 July – see the end of this link for contact details.