Updated: Jun 25, 2021
Published on January 21, 2020
Well, it will soon be all over. The Election is won, Brexit is confirmed for the end of January 2020 and the future will be what it will be – AND the SRA has implemented its new Standards & Regulations (STARS), effective from 25 November 2019. 2020 has a much calmer (and resigned) outlook than did 2019. Along with new – and briefer – Accounts Rules and the obligation to adopt the SRA clickable logo, the STARS have ushered in a novel approach to regulation. I mention here the main things that immediately occur to me, but in future months I will be offering some further, more reflective thoughts on the implications of the new regime. My top 5 thoughts are: 1 Loss of monopoly We – the learned legal profession - have lost our age-old monopoly over the right to employ ‘solicitors’ to offer legal services to the general public. The tide turned against us on this one some years ago, when the Competition & Markets Authority pointed out that 90% of members of the general public with a legal problem will not go and see a solicitor (mainly as a result of misperceptions about the cost of so doing). This has led to the Transparency Rules 2018 the efficacy of which is yet to be determined, but which has led to a rethink over the marketing challenges facing us in the fight against others (professions, as well as commercial entities) who want to offer the services of a solicitor to our historical client-base. Time will tell whether this will increase our recruitment difficulties. 2 Legal professional privilege One disadvantage of taking legal advice from a ‘solicitor’ working in a non-regulated environment is that the advice sought and given will probably not benefit from the cloak of legal professional privilege, as it would be given by a solicitor on behalf of a non-regulated business, rather than a law firm. Recent Law Society publications have mentioned this drawback, but it is one thing that the SRA clickable logo fails to mention, and it seems that it may have slipped detailed scrutiny elsewhere too. I wonder whether it is not something that we should be trumpeting as a key advantage of instructing a regulated professional lawyer, rather than an alternative. 3 Professional indemnity insurance Now that Aon has left the market, the indications are that the PII market will get even tougher and harder. Recent attempts by the SRA to reduce the MTC terms of cover from £2 million to £500,000 have also been shelved in the face of opposition, and indications that the price of the cover would not reduce. Might this not be an inducement to reconfigure parts of our businesses away from the regulated market and to another provider with less exacting terms? 4 New professional Codes The new Codes of Conduct swing the spotlight back on to the individuals who wish to be known as solicitors, regardless of where they work. This is coupled with an increased muscularity on the part of the SRA, best evidenced by the separation of the two principles – acting with honesty and acting with integrity – into separate principles of their own. Recent case-law has emphasised that one can act with complete honesty, and yet lack integrity. Doing the right thing regardless, has never been more critical. 5 New Accounts Rules Much has been said and written about the briefer new Rules, but much development will yet be undergone (particularly between firms and their auditing accountants) to ascertain the true extent of the apparent relaxations that the new Rules seem to permit. Watch this space.