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SRA must not 'drop the ball' on diversity

Risk-based approach could make it harder to collect data

12 December 2011

Outcomes-focused regulation (OFR) could make it harder for the SRA to collect diversity data, it has emerged.

The regulator has been under pressure to explain why ethnic minority solicitors feature so disproportionately in its regulatory work.

According to the latest equality data published by the SRA, 29 per cent of solicitors who had conditions imposed on their PCs last year were from BME backgrounds, 31 per cent of solicitors referred to the SDT and 38 per cent of solicitors subject to intervention.

The percentage of solicitors coming from BME backgrounds is currently 12 per cent.

Mehrunissa Lalani, head of inclusion at the SRA, told a board meeting in London last week that it was “important that we do not drop the ball” on diversity.

“One of the things we need is a really good system for capturing the data.”

Lalani said that independent audits carried out by the SRA in the wake of the Herman Ouseley and Pearn Kandola reports on disproportionality showed no evidence of discrimination or unfairness.

Charles Plant, chairman of the SRA, suggested that this meant that efforts to resolve the problem had been successful.

In a progress report for the board, SRA officials said its largest source of information and intelligence came from ‘lay informants’, mainly consumers.

They said that in the past the regulator had opened a new file for each report from a lay informant, but the new approach to collecting data under OFR was to give all information a “risk scoring” to help decide what to do with it.

“We acknowledge information received, but, unless we need further details from the person providing the information, we are unlikely to stay in touch with them.

“This has made it difficult for us to collect data from informants, including diversity data, in the way we used to.”

Speaking to Solicitors Journal afterwards, Lalani said that under the old system information from ‘lay informants’, usually in this case consumers from BME backgrounds, would be explored in depth.

“The old regime looked at every matter which came to us,” Lalani said. “Now we are targeting resources on where there is the greatest risk.

“The frequency of communication with the informant is less, so there are problems in capturing all of the data. It’s not going to be impossible, but it’s one of the challenges we face.”

The report found that both Lord Ouseley and Pearn Kandola concluded that the issue of disproportionality was complex and matters such as size, qualification route, experience and area of practice seemed to be key in determining regulatory action and disproportionality.

“We know, through our diversity monitoring of regulatory outcomes, that BME solicitors are over-represented in sole practice,” SRA officials said.

“In 2010, 7.8 per cent of BME solicitors were in sole practice compared to 4.1 per cent of white/European. Similarly, one half of BME solicitors (50.2 per cent) worked in firms with four or fewer partners, compared with 28.7 per cent of white Europeans.

“Given that smaller firms are more likely to get into difficulty or face reports, the latter being borne out as the SRA receives a disproportionate number of reports about BME solicitors, this would suggest that disproportionality may continue unless the structure of legal service providers changes.”

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Regulators Discrimination