SRA to 'destroy high street conveyancing'?
New plans by the Solicitors Regulation Authority (SRA) to prevent mortgage lenders from claiming solicitors’ compulsory indemnity insurance has drawn an ominous warning from the Law Society Chief Exec, Des Hudson, who said it will “destroy high street conveyancing”.
In an interview published on the Legal Futures website, Mr Hudson said lenders will respond by “introducing super-panels overnight” and, if he were a conveyancer, he would “buy a ticket to Rio”, any interpretation of which does not bode well for the conveyancer.
The SRA launched a huge overhaul of the regulatory system earlier this month and the reform programme sees radical changes to indemnity insurance and solicitors’ compensation fund.
One such change takes away the right of businesses with annual turnovers of more than £2m a year to rely on compulsory indemnity insurance.
Mr Hudson said he was “very, very nervous” about the SRA’s timetable for the reforms, saying at last week’s Manchester Law Society regulatory conference, that August seemed to soon for the market to be ready.
“If you think we have a problem with conveyancing panels now, wait until August,” he said.
“At the very least, I would need time to put together an insurance product to help these firms.”
Mr Hudson was also skeptical about the SRA’s plans to relax the conflict of interest rules, saying it raised “difficult philosophical questions”.
He went on to say: “I’m not sure whether they see us as a business made up of former professionals with some professional standards, or a profession. What is it that society wants of its lawyers?”
Mr Hudson was doubtful of the SRA’s reforms, with only a small concession for the proposed move towards self-certification for continuing professional development (CPD), which he said was “logically consistent”, but went on to say clients need solicitors to “demonstrate certainty” that they have been trained.
Mr Hudson also called for more collaboration between the Law Society and the SRA, likening the relationship between the two bodies to that between “the government and Her Majesty’s opposition”.
He said: “There are times when we need to disagree, but things are improving. What we need to change is what happens when the machine doesn’t work, so there is more collaboration with the Law Society.”
A combination of the recession, regulatory uncertainty since the Legal Services Act, and “intensive and unremitting” pressure on pricing were blamed for creating a “really difficult time” for solicitors in private practice, with only the top 5 per cent of firms increasing their profits in the past 12 months, according to the Chief Exec.
His vision for the future of legal services was one that would be “very attractive for the most able lawyers”, but with the highest rewards only going to a “very thin crust”. “It will be harder as a lawyer going forward,” Mr Hudson said.
“The practice of law will be demanding, increasingly polarised and increasingly focussed on high-end activities beyond black-letter law. It will be a complex, nuanced, interesting time.”