Law Society: Budget mystery
The cost of practising for solicitors is set to stay the same even though the Law Society is unable to say at the moment what its budget will be for the next financial year.
Despite ongoing pressure from the Legal Services Board for greater transparency, this year the Law Society and Solicitors Regulation Authority (SRA) have for the first time issued separate consultations on their financial plans.
They contain less information combined than the single consultation for the whole group that the society has published in previous years.
It has not said what the overall group budget will be, nor how much of it the Law Society and SRA will seek to recoup directly from solicitors through both the individual practising certificate fee and the fees paid by firms.
The society has not confirmed that the firm fees – which make up 60% of money collected – will remain the same, although Legal Futures understands that they will.
Last year, the Law Society’s group budget was £133.6m, of which £101.2m was collected from practising fees.
Earlier this month, the SRA said it planned to increase its budget by £2m in the next year to nearly £72m, but that it did not expect its share of the practising certificate fee to grow.
The fee has remained unchanged at £278 since 2017/18. The SRA proportion throughout has been between £147 and £151, and it predicted this would continue in the coming year.
The Law Society began its consultation this week and said it too would not be seeking more from the fee.
It plans to maintain its share of the overall practising fee income at £28.5m – last year’s £3m reduction was recouped in part by Chancery Lane drawing on reserves.
Practising fees are largely to pay for regulatory activities, but the Legal Services Act 2007 allows the Law Society in its representative guise also to use them for ‘permitted purposes’ – certain prescribed non-regulatory activities, such as law reform.
It has to fund activities not covered by permitted purposes from other income.
After a lengthy to and fro with the Law Society, it confirmed to Legal Futures that the society’s own budget will be around £44.7m, with the amount not collected from practising fees coming from commercial activities, investment returns and, “as appropriate”, reserves.
Practising fees also pay for the levies imposed to cover the Law Society’s contribution to the Legal Services Board, Legal Ombudsman, Solicitors Disciplinary Tribunal and Office for Professional Body Anti-Money Laundering Supervision.
But a Law Society spokesman said it was “still finalising” the exact amounts of these.
President I Stephanie Boyce said: “We want to make this our biggest and widest consultation on the PC fee and business plan yet…
“In addition to the survey, we have been engaging members in focus groups over the last month, concentrating on reaching groups that we don’t tend to hear from as often…
“Where members tell us we need to adapt our plans, we will listen and be led by what the evidence is telling us we need to do.”
Last year’s consultation found that two-thirds of solicitors did not consider the practising certificate fee value for money, with many expressing concern at the level being charged given the impact of Covid-19. However, no changes were made as a result.
We reported last week that the Law Society of Scotland has, by contrast, reduced the cost of practising for the second year running in recognition of the impact of Covid-19 on its members.
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