The Legal Services Board (LSB) is responding to a “rapidly evolving” legal sector and plans to change its approach to oversight regulation to focus efforts on “where they are most needed”, according to its business plan for 2026/27.
Recently appointed LSB chair Monisha Shah said that while she will focus on discovery in her first year to deepen her understanding of the challenges faced by consumers and legal service providers, the LSB would change its approach to oversight regulation and focus efforts where they are needed most. The organisation will make “sharper, more targeted interventions,” she explained, reducing the burden on better performing regulators.
Last year, the focus for the oversight regulator was to improve ethical standards within the profession, as well as work to protect the public from risks emerging from market developments. This year’s business plan sets out how it will strengthen the performance of legal services regulation in England and Wales through more proportionate and targeted oversight.
The plan has been developed in response to what the LSB said is ongoing change across the sector, including technological innovation, shifting consumer expectations, and the growth of unregulated services. The organisation has also come under fire for its failure to properly supervise the Solicitors Regulation Authority in light of recent regulatory scandals including Axiom Ince and SSB Group. In response to the draft plan shared earlier this year, The Law Society said the LSB should continue to strengthen its oversight of regulators’ performance to avoid consumer harm and prevent collapses.
The plan outlines four key objectives: effective, proportional and risk based regulatory oversight to reduce the burden on well-performing regulators while taking robust action where performance falls short; a focus on policy changes which have the most impact on consumers and the professions; improving the capacity to respond to the needs of the legal sector; and enabling organisational excellence and efficiency. Specifically, the plan name-checks both the SRA and the Bar Standards Board (BSB), requiring them to improve their performance.
As the oversight regulator for the Legal Ombudsman (LeO), the LSB will continue to work with the Office for Legal Complaints to identify how best LeO can address rising demand for its service, including whether an alternative delivery model is more suitable.
The rapidly evolving legal landscape also poses risks to consumers from increasing activity in the unregulated sector, the report notes, which is harnessing artificial intelligence to deliver “unmet legal needs”. Consumer research into how consumers expect AI and online legal tools to behave in the future will be published to inform what, if any, safeguards should be in place and whether regulation is needed.
The LSB’s board has approved a budget of £5.812 million for 2026/27, slightly higher than in the original consultation and reflecting a 1.7% increase on the previous year, and adding £1.79 to the practising fees paid by each authorised person. Recruitment will begin for a new director of regulatory oversight to support delivery of the LSB’s revised approach.
LSB chair Monisha Shah said: “The legal services sector is evolving rapidly, and effective oversight has never been more important. The changes to our oversight model will focus on proportionate, targeted regulation that protects consumers, supports innovation, and maintains public confidence.
“As a new Chair, I will also dedicate time to deepen my understanding of the challenges faced by consumers and by legal service providers. This will help to further inform the crucial role that regulation can play in narrowing the gap between a thriving legal sector and better access to justice for the public.”
