The Solicitors Regulations Authority has confirmed it will “work with stakeholders, including through working groups” to identify alternatives to the proposals to separate compliance officer roles from those with unilateral decision making.
Last month the SRA said it would “pause” those plans after it faced backlash from the profession.
Now the regulator says it acknowledged feedback the “original approach could have had unintended consequences within smaller firms and sole practices” with the move to conduct a fuller review would enable alternatives to be considered and tested.
Aileen Armstrong, executive director, strategy and policy explained in the short term the SRA would undertake targeted activity with individual firms during which they would be monitored and where needed take action, including appropriate governance arrangements so that the compliance functions are able to operate with the necessary independence.
“As the regulator, we are committed to acting decisively where consumers are being placed at potential risk of harm” she said, adding: “This includes both targeted activity with individual firms and working toward the introduction of wider regulations and requirements which will safeguard consumers of legal services.
“Already we have had productive conversations with stakeholders and will have even more moving forward. The insights we gain from these discussions are proving very useful in helping refine and develop our next steps.”
The proposed roll out of the new rules in January 2027 has now been pushed back with any future implementation to ensure there is an appropriate lead-in time
Amongst the campaigners who took the SRA to task were The Law Society, the SME & Boutique Law Firm Alliance, and the Conveyancing Task Force.
Welcoming the news Law Society of England and Wales president, Brett Dixon, said: “We are pleased to see the SRA has listened to the serious concerns raised by the Law Society and our members about its compliance officer measures and committed to take action to address them. We welcome the commitment to establishing working groups which must have representation from those businesses and practitioners most affected.
“The regulator is right to take these measures off the table to allow time to review the impact of the current proposals and make appropriate changes to ensure a risk-based approach is taken which draws on reliable data and evidence. It’s vital that any new measures reflect operational realities for law firms and solicitors, while also protecting consumers.”
Stephen Larcombe, chair of the CTF , added: “We welcome the SRA’s decision, and we credit the regulator for listening. But this is a pause, not a resolution. Many law firms delivering vital legal services to communities across the country still face serious pressures on their long-term viability. Regulation must continue to evolve, and so must the way the profession is represented. Any change must be real, not performative.”
COLP/COFA Plans
The paused COLP and COFA plans refer to proposed amendments to Rule 8.4 by the Solicitors Regulation Authority (SRA), designed to strengthen firm governance and client money protection following the Axiom Ince collapse.
Under the proposals, law firms would be banned from appointing an individual to the roles of Compliance Officer for Legal Practice (COLP) or Compliance Officer for Finance and Administration (COFA) if that person also holds “unilateral decision-making” responsibilities or significant control over the firm. The rule introduces mandatory separation of these oversight roles from primary decision-makers once a firm hits specific financial thresholds: a turnover of £600,000 per annum or holding £2 million in client accounts.
