The ongoing dispute between the Law Society and the Solicitors Regulation Authority (SRA) has escalated after a row broke out over whether the regulator should formally split from the representative at Chancery Lane.
The debate was triggered over practising certificate (PC) fees after SRA chief executive Paul Philip said the SRA would return the £35m per year fee back to the legal profession if his organisation becomes fully independent.
In a board meeting last week, Philip argued the Law Society’s share of the funds, which amount to £250 for every solicitor, should be returned back to lawyers, and that is something the regulatory arm would consider provided it became independent.
The PC fee debate comes after the Treasury said last year it would consult on making regulators independent of the representative body in a bid to boost competition in legal services.
A former City law firm partner, who now works as a consultant to the industry, said: ‘This is going to blow up. Everybody pays money to the Law Society, half goes to the SRA and the rest the Law Society keeps. If the SRA does go independent, people will ask what the Law Society is doing with the funds. The SRA is doing a decent job but the Law Society needs to find a clearer role as a representative of the legal profession.’
Other City partners argue SRA head Philip – who took up the post in early 2014 from General Medical Council – joined from a medical background where the regulatory body was separate from the representative, and that this will reinforce the shift in the legal profession. ‘He [Philip] comes from a paradigm where both bodies are kept separate,’ says one managing partner at a City firm. ‘If you have one body representing both sides, best public interest can be confused.’
However, from speaking to other London-based partners, many seem indifferent to the recent debate as one partner told Legal Business: ‘I don’t have a view one way or another. I have got used to paying it [the PC fee] and if the SRA was to return it then the Law Society would have to find it from elsewhere,’ he said but then added: ‘I think it would be better to have separate bodies representing and regulating.’