The Law Society of England and Wales has responded to the Solicitors Regulation Authority’s (SRA) 2024-2025 business plan and budget consultation.
The SRA have said that their business aim is ‘is driving confidence and trust in legal services’. The business plan, which came into effect in 2023 and will span until 2026, outlines a list of key priorities for the regulator, including issues within diversity and inclusion. The SRA have said: ‘They would explore and responses to persistent EDI issues, including within professional examinations and our enforcement activities.’ The SRA have promised they will ‘take forward plans to introduce an EDI evaluation framework’.
The regulator said they would improve their approach to enforcement and that this may include ‘financial penalties’.
The SRA have also said they will respond to the Legal Services Board’s(LSB) guidance around the new regulatory objective to promote the prevention and detection of economic crime, and to changes in money laundering regulations.
Diversity and inclusion priorities will include providing the Solicitors Qualifying Examination (SQE) in the Welsh language from the start of 2025 and also delivering the SQE as a three year evaluation.
Anti Money Laundering issues span to considering the outcome of HM Treasury’s present consultation on the future of anti-money laundering supervision.
The SRA outlined in one of their other key priorities: “Our work under this second strategic priority area centres around delivering better regulation by taking proactive, risk-based action – and making decisions to act that are informed by the best available data insights, and credible intelligence.”
“The legal services sector, and the people and businesses that operate within it, evolve continuously. To safeguard members of the public from risks that shift and transform, and to make certain we are actively meeting the Legal Services Act’s regulatory objectives and other duties we are tasked with, proactive regulation enables us to keep pace and deliver our regulatory response in the most effective ways.”
In response to the consultation, launched in May, the Law Society welcomes a continued focus on, equality, diversity and inclusion (EDI), anti-money laundering (AML) and technology and innovation.
Law Society president Nick Emmerson said: “As a general principle, we would strongly encourage the SRA to prioritise its focus on core activities and only undertake additional workstreams based on evidence of regulatory need, or specific gaps in responding to consumer needs.
“The SRA’s continued focus on the areas outlined in the business plan align with our own priorities.
“The SRA continues to improve its diversity data collection, which will inform tangible and meaningful actions to drive positive change on EDI, especially to address persistent EDI issues within professional examinations and the SRA’s enforcement activities.
“We are also pleased the SRA is continuing to encourage diversity at senior levels in law firms and would like to understand what activities and regulatory levers the SRA will use to support this, as well as where they will work in collaboration with other stakeholders.”
On AML, Nick Emmerson added: “The solicitors’ profession is fully committed to tackling illicit finance and money laundering. This is demonstrated by the significant resources allocated to complying with its AML and financial crime obligations, which results in a substantial public benefit.
“Whichever option HM Treasury pursues on the future of AML supervision, the Law Society’s expertise and involvement is vital as we continue to work with the SRA to draft guidance for the legal sector which is in line with the updated Money Laundering Regulations.
“This is even more critical given the ongoing change to legislation and the rapidly evolving and ever-expanding regulatory requirements.”
On technology and innovation, Nick Emmerson concluded: “We remain supportive of the SRA’s collaboration with small firms and helping them to adopt appropriate technology to enhance their ability to meet consumers’ needs.
“Our members have raised concerns about trying to keep up with the rapid pace of technological innovation, given the associated financial and resource costs.
“There are concerns about how firms, particularly small and medium-sized (SMEs) firms, can meet their regulatory obligations, professional standards and increase consumers’ ability to engage with and access legal services.
“Support should include information in plain English about technology procurement practices and each technology’s functionality, limitations, risks and benefits.
“In common with SMEs in other sectors, incentive packages and support with investment for taking-up new technologies will be an essential enabler of adoption and change.”
