Practising Certificate Fees in
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1 Practising Certificate Fees in Consultation with solicitors Summary of results Tuesday 7 July 2015 The consultation document and the these can be viewed online.
2 NFR Consultation response We issued a consultation document on 19 June 2015 setting out the proposed practising certificate (PC) fee and budget. We invited feedback via an online consultation between 19 June and 2 July The consultation was promoted through Professional Update, on our website and via our Twitter account. We asked the following questions Q1: Do you think the practising fees for represents value for money in terms of the benefits you gain as a solicitor? Q2: Do you think the split of spending across the Law Society Group between the Law Society professional body, the Solicitors Regulation Authority, Legal Ombudsman, Legal Services Board and Solicitors Disciplinary Tribunal is reasonable? Q3: Do you think that the approach taken by the Law Society professional body to its usage of practising fees is reasonable? Q4: Do you have any other comments? Summary of results The consultation which we must remember is only indicative since it comes from a selfselecting sample had 187 responses (18 fewer than last year) and sets out some clear views from the respondents. In addition we received a response from the City of London Law Society which responded in depth to our proposal to take a new approach to our treatment of commercial income. Q1: 84% of respondents think the PC fee does not represent value for money in terms of the benefits received. Qualitative comments show members would support a review of the fee and payment structure taking into account part time working and a staged payment structure. Many members seem unclear on the benefits - both range and scope - available to them. Q2: 67% of respondents think the allocation of funds between the Law Society professional body, the Solicitors Regulation Authority, Legal Ombudsman, Legal Service Board and Solicitors Disciplinary Tribunal is not reasonable. An analysis of qualitative responses to this question shows support for a reduction of the share awarded to the SRA and an increase to the Law Society. However a number of members commented that regulation costs are too high overall. Q3: 67% of respondents think that the approach taken by the Law Society to the use of practicing fees is not reasonable. Qualitative comments show the Law Society could improve communication with members to emphasise the range and scope of benefits as well as our work in representing members and member issues. Q4: Themes from the open ended Q4 are covered at the end of this report. Page 2 of 7
3 Q1: Do you think the practising fees for represents value for money in terms of the benefits you gain as a solicitor? Answer Percentage responses Number of responses Yes 11.77% 22 No 84.49% 158 Don't know 3.74% 7 TOTAL 100% 187 Additionally 109 qualitative comments were left by respondents grouped into the broad themes shown below. Acceptability of the PC fee: respondents recognised that the PC fee was acceptable and compared well with other jurisdictions (4 comments). That the PC fee is too high: too expensive and excessive compared to other professions and jurisdictions (10 comments). Changes in the way the PC fee is calculated (9 comments) including: making allowances for a sliding scale based on income (high street solicitor vs corporate solicitor) or reductions for sole practitioners reductions for those practising exclusively in criminal litigation and advocacy reinstatement of reduced fees for those who work part-time reductions for those on maternity leave, who are unemployed or solicitors who only work part of the year reductions for PQE status payment of a flat rate fee per solicitor. Change what is included in the PC fee (3 comments) to include more free training and courses e.g. "It would if it included things like free Practice Management Courses, free compliance software and other free training. As it is, we just pay to be regulated." Page 3 of 7
4 Criticism of the cost of the Solicitors Regulation Authority (SRA) (10 comments): respondents thought regulatory costs were too high and asked for self-regulation, reductions in the cost and amount of red tape and complained about the lack of understanding or support from the SRA. There was also concern over the proposed limitations of the core functions of the SRA and "ideas which have no obvious benefit to anyone such as the replacement of client accounts with third party accounts." Criticism of regulatory costs in general (4 comments): that "regulatory expense is far too high especially as more and more regulation is pushed back to the profession to deal with and self-report." and that there is too much overlap in regulation. Criticism of the Law Society professional body (TLS) (10 comments): that the Law Society does not provide value for money and that members do not get benefits or that TLS does not represent sole traders. Lack of knowledge of member benefits provided by TLS (48 comments): several respondents queried what benefits were provided by TLS or were unaware of some of the benefits (e.g. Practice Advice Line). Some respondents thought benefits were too Londoncentric (3 comments). Particular queries were raised by criminal solicitors (7 comments), inhouse solicitors (10 comments), high street solicitors (4 comments) and overseas solicitors (1 comment). General criticism of TLS representing members (13 comments): respondents questioned whether TLS does enough to support and represent members - " You are not protecting the brand of 'solicitor' and ultimately that is key." - as well as criticising salaries paid to TLS staff and specific projects (e.g. Veyo) or activities (e.g. Black Solicitors Week). Q2 Do you think the split of spending across the Law Society Group between the Law Society professional body, the Solicitors Regulation Authority, Legal Ombudsman, Legal Services Board and Solicitors Disciplinary Tribunal is reasonable? Answer Percentage responses Number of responses Yes 32.22% 58 No 67.78% 122 TOTAL 100% 180 Additionally 83 qualitative comments were left by respondents grouped into the broad themes shown overleaf. A number of respondents (13) felt they had insufficient evidence to comment. Page 4 of 7
5 TLS should get more and SRA get less of the share (24 comments): these included comments that: too much is spent by the SRA on regulation and efficiency savings could be made especially with decreasing levels of regulation; increase TLS share as "there is direct effect upon the services provided to members" and " I would like to see a larger proportion of funding directed towards the Law Society and helping to support those in the profession" and " I would like my representative body to have a far greater proportion of the total" SRA guidance is "vague and uninformative and their various new regulations/rules are a hindrance to good commercial practice." Criticism of the Ombudsman and SDT (2 comments): that these organisations should have less of a share of funds available. That TLS should receive less (7 comments): either TLS should reduce spending and costs and "The Council it too large and is of very little benefit to practising solicitors. The number of Council members must be reduced as per the outcome of the last referendum when we asked for a Council a third of its size." That the split is broadly correct (5 comments) and " allows each individual body to deal with their allocated powers and responsibilities appropriately." Regulatory costs are too high and more should be spent on representation (27 comments): many respondents commented on the high cost of regulation including: "the costs of regulation is too high. This needs to be slashed dramatically and there needs to be a return to simple, clear Practice Rules." "Most of the money goes on regulatory/disciplinary functions and very little on representative functions." Too much emphasis on regulation and not enough on supporting Solicitors. The profession is grossly over-regulated in comparison to others. Q3 Do you think that the approach taken by the Law Society professional body to its usage of practising fees is reasonable? Answer Percentage responses Number of responses Yes 32.60% 59 No 67.40% 122 TOTAL 100% 181 Page 5 of 7
6 Additionally 68 qualitative comments were left by respondents grouped into the broad themes shown below. Correct approach but more transparency needed over spend (6 comments). Paying too much (5 comments): comments included: "As a sole practitioner, I fail to see why I have to pay for a certificate as an individual and as a firm." "those in local government should pay less fees than those in private practice." Increasing the spend on representation and campaigns (26 comments) including: More of the PC fee should be used by TLS to campaign for the position of solicitors. Insufficient is undertaken by TLS furthering and protecting the interests of its members. You fail to represent the small business and sole practitioners who are struggling with compliance, compensation claims and lack of work given away. I think that the fee still needs to become more tailored to the sector and area of legal work practised. One size does not fit all and in today's environment the law society must and should be able to come up with a more sophisticated mechanism to account for the risk that the cohort of solicitors represent, the area of legal work, the size of firm they work for and charge the certificate fee accordingly. Thank you I want credible and effective representation to and with a government that is demonstrating on a daily basis that it has nothing but contempt for the rule of law. Criticism of spend on particular projects such as Veyo. Overall criticism of spend by TLS and the SRA (11 comments) Suggested changes to regulation (6 comments) including the abolition of SRA/TLS and move to self-regulation. Q4 Do you have any other comments? 88 respondents left comments grouped into the broad themes shown below. Decrease or change PC fees and/or TLS component (13 comments): including reducing fees for those on a low income; decreasing fees in general, reviewing contributions to the indemnity fund; reducing fees for legal aid solicitors, part-time workers; instalment payments; voluntary levy for TLS membership. Specific comments about in-house solicitors (4 comments): querying benefits for inhouse solicitors and whether their fees subsidise those in private practice; and affordability for in-house solicitors who have to pay their own PC fee. Separation of SRA and TLS (4 comments): respondents pointed out the conflict of interest between TLS and SRA; regarding regulation and representation and queried accountability for the SRA. Better representation (12 comments): some respondents suggested SRA and TLS are not member friendly (especially when compared to the Bar) and do not represent all sectors equally e.g. " I think The LS is too focused on supporting the top 100." Other comments included: It would be useful for the Society to continue to recognise that solicitors are continuing to take alternate paths within the profession including in house and as remote and expense sharing partners. There is too much focus on supporting the larger firms. Overregulation and client care overdrive requirements are freezing the profession in fear and unprofitable to the profession. Page 6 of 7
7 The Law Society is fast becoming nothing more than a commercial organisation. As it does so, its representative function is increasingly diluted and appears to be ancillary to everything else it does. I get nothing out of paying my fee - except the offer of more services which I have to pay for. I believe from my experiences that the Law Society and the SRA aim to support and uplift law firms, private partnerships, and other revenue generating players in the legal field rather than the individual solicitor; the accreditation schemes and other quality schemes are all aimed at firms rather than individuals even though the individual solicitor is paying practicing fee irrespective of the fact that he may be a struggling new entrant or an established professional, there is no provision or schemes that are focused on developing their individual skills or credibility. A self employed or a locum solicitor has no hope of claiming accreditation in his chosen specialisation unless he is linked to an accredited firm. Page 7 of 7
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