Rebecca Atkinson, Director of Risk at Howard Kennedy, looks at the Solicitors’ Regulation Authority’s (SRA) Business Plan for 2020/21. Although subject to change following consultation, the current draft indicates the direction of travel for the SRA and the impact on the profession in terms of regulation.
In June 2020 the SRA published their draft business plan and budget for 2020/2021 and for the first time opened a consultation on its contents (which closes 26 August 2020).
The Corporate Strategy 2020-2023
The SRA’s Corporate Strategy 2020-2023 (published in March 2020) forms the basis of the SRA’s overall business plan. The Corporate Strategy sets out the SRA’s objectives as follows:
- Objective one — they will set and maintain high professional standards for solicitors and law firms as the public would expect and ensure the SRA provide an equally high level of operational service.
- Objective two — they will actively support the adoption of legal technology and other innovations that help to meet the needs of the public, business community, regulated entities and the economy.
- Objective three — they will continually build their understanding of emerging opportunities and challenges for the legal sector and their role in effectively regulating it.
The draft Business Plan 2020-2021
In their draft, the SRA set out the planned activities under each objective.
The SRA’s overall budget for their business plan is approximately £71m with objective one taking the lion’s share of the budget at 92% and objectives two and three coming in at 4% each.
The SRA set out that ‘their ambition is to be a progressive and relevant regulator, able to anticipate and respond with agility to emerging opportunities and challenges for the legal sector in England and Wales.’ This will be ‘built on the foundation of doing our core work well and delivering excellent service.’
To achieve this, they say they will be anticipatory, evidence and intelligence driven, responsive, collaborative, agile and authoritative. But what does this really mean in practice? The activities planned under each objective provide clues to how this is to be achieved.
Objective one—setting and maintaining high standards for the profession
The SRA are planning the following:
1. Solicitors Qualifying Examination (SQE) and solicitor competence
To make sure everyone meets the same high standards the SRA will introduce the SQE in autumn 2021 (in English and in Welsh). The SRA also plan a strategic review of the continuing competence regime and it may be that they will undertake this via thematic review visits. They will also focus on the quality of advocacy and criminal practice as well.
2. Anti-money laundering
AML compliance is a priority for the SRA and this will continue. The draft business plan outlines a plan to conduct AML visits on what they deem to be high-risk firms on a three-year rolling basis alongside sampling lower risk firms. The SRA also set out that they are planning to undertake a thematic review into tax advice given to clients.
3. Price transparency
The SRA say they will work with the Competition and Markets Authority to review the effectiveness of the pricing and transparency requirements. Their rolling programme of firm website reviews and enforcement will continue and they will be ploughing more resources into this endeavour.
The SRA will also be monitoring their investigation and disciplinary work by establishing a quality assurance team and they also plan to engage external auditors in the future. It seems therefore that professional standards apply to the SRA too. This will no doubt be welcomed by the profession.
4. Equality, diversity and inclusion
The SRA plan to commission research to further understand the factors that contribute to the over-representation of small firms, men and the black, Asian and minority ethnic community in the SRA’s disciplinary processes.
5. UK-EU exit and Wales
The SRA say they will continue to work with the UK government to ensure a smooth transition out of the EU for the profession. They also plan to open an office in Wales
Objective two — technology and innovation activities
1. Increasing understanding of the use of technology in the legal sector
The SRA’s goal is to support fair, accessible and inclusive legal technology that has the potential to increase access to justice. To do this they plan on working in partnership with others and will be setting up a specialist innovation and technology panel.
2. Promote and develop the use of legal technology and innovation
The SRA will review how their Innovation Space (a group set up to support firms to try new ways of working in a safe and managed environment which ensures public protection) is working and develop this further in light of the new Standards and Regulations. The SRA want to assist firms in delivering services in an innovative way and plan to undertake research into cyber prevention methods and how losses linked to cybercrime can be prevented using technology.
Objective three- anticipating and responding to change
1. Improving understanding
The SRA plan to increase their knowledge of the social, political, economic, international and environmental pressures to enable them to spot trends early on and to develop their understanding of consumer concerns and requirements in relation to the legal services market. The SRA plan to look too at the impact of Covid-19 on the structure of the legal market and how services are accessed by consumers as a result.
2. Working in partnership and ‘speaking up’
The SRA outline their intention to partner with other stakeholders and to speak up authoritatively in line with their regulatory objectives.
3. Public legal education
The SRA plan to continue their work on increasing awareness of legal services and how to use those services by developing guidance and support materials as well as technology aides for the public.
4. Immigration and asylum services
The SRA outline their commitment to continue working with charities, consumer and provider representatives, other regulators and the Legal Ombudsman to help ensure immigrants and asylum seekers understand their rights and assist them in accessing quality advice.
5. Understanding patterns of attainment in education and training
Although there is a well-evidenced differential attainment affecting black, Asian and minority ethnic groups the SRA hope to achieve a fair and consistent assessment of students through the SQE. The SRA plan to continue sharing data, commission research and work with others to increase understanding of the issues at hand and what might be done to tackle them.
The compensation fund
The SRA’s draft business plan also sets out for the first time the SRA’s new principles for setting contributions to the compensation fund (a discretionary fund of last resort used to protect consumers). These principles are:
- the overriding principle will be to maintain viability of the fund
- the SRA will ensure that the professional contributions to the fund are as manageable as possible for those they regulate
- the SRA will collect contributions to the fund in a way that is manageable for those they regulate
- the SRA will be transparent about the fund monies and their management
The consultation and draft business plan can be accessed here.