The SRA's bonfire of red tape is a slow burn
The regulator's out with the old, in with the new attitude to handbooks and accounts rules is still a long time coming, writes John van der Luit-Drummond
The Solicitors Regulation Authority's (SRA) decision to ditch 'complex rules and unnecessary bureaucracy' looks set to continue, after the regulator's board agreed to use its unwieldy handbook as kindling for the promised 'bonfire of regulation'.
Plans to cut red tape by reducing the size of the handbook has been an ongoing exercise for the SRA. Its executive director of policy, Crispin Passmore, has already seen the hefty 600-page tome be chopped down by a third, but bigger, more ambitious cuts are now to be made.
The current handbook - 400 pages of regulatory requirements including a 30-page code of conduct - is to be slimmed down to just 50 pages, focusing on principles and professional standards rather than 'complex, prescriptive rules'. 'Yay' for the forests and 'hooray' for solicitors; but this is not just an exercise in environmental policy execution.
The regulator believes that moving away from a 'one size fits all' approach, with separate codes of conduct for solicitors and for law firms - five pages for each - will benefit consumers and solicitors by making individual responsibilities and obligations clear. A reduction in the cost of compliance and an opening up of new opportunities for solicitors to deliver services outside of regulated legal businesses, such as in-house or other companies, are other aims of the reforms.
As the SRA's chief executive, Paul Philip, acknowledged, the current rules are out of step with a rapidly changing legal market. His hope is that the proposals for a 'shorter, sharper, and clearer handbook' will allow the profession to get on with the business of delivering legal services to the public. Who can possibly argue with that?
The reforms don't end there, however. The redefinition of 'client money' will allow fees and disbursements to be treated as firm money, while monies held for other payments, such as stamp duty, will remain as client money. Safeguards on third-party managed accounts will also be introduced. This is another welcome development: the accounts rules have not been updated in two decades, leading to confusion from new entrants to the market and 'technical breaches' from existing firms.
However, as everyone knows, there's no such thing as a free lunch. Before the profession can begin the BBQ season by roasting their favourite meats over a roaring pile of flaming handbooks and account rules, there is a lengthy consultation process to complete. The handbook review document runs to a weighty 130 pages, while its accounts rules counterpart is around half that length. The 16-week 'Looking to the Future' consultation will run until 21 September 2016, with a second phase taking place later this year to review the detail of the practice framework and authorisation rules.
Having already completed 18 months of consultations, there is a risk of burnout for solicitors who have had little respite from the regulator. But, as Passmore points out, too short a consultation and the SRA could be accused of steamrolling over solicitor concerns.
Yet if there is any evidence that consultation responses are taken seriously, it was with the revelation that plans to introduce the controversial solicitors qualifying exam (SQE) are to be delayed. Whether the super exam also finds its way into the regulator's bonfire remains to be seen, but as Passmore and Philip admitted, it will not be implemented until they get it right; if at all. Watch this space.