The Legal Services Board has backed proposals to charge individual lawyers an annual practising certificate fee of £428 as part of a move to substantially overhaul the funding of solicitors’ professional regulation.
The move will see the costs of the practising certificate shift from a single levy on individuals to a new system which will see the charge shared by individuals and their law firms.
It is expected that the new policy will see law firms cover the bulk of the costs of the Law Society and Solicitors Regulation Authority (SRA) for 2010-11.
Announcing the new fee regime this week, the SRA unveiled details of how law firms would be charged. The model will work with a sliding scale based on turnover with firms with revenues of less than £19,999 paying 1.1% of turnover, falling to 0.1% of income for firms with revenues in excess of £150m.
The move will be welcomed by in-house lawyers, with many questioning why they should bear the full costs of the practising certificate fee when the bulk of professional regulation focuses on private practice lawyers.
The shake-up in funding is cited as part of a wider shift by the SRA towards “firm-based regulation”, as opposed to the traditional emphasis on individual solicitors.
The SRA said as part of the statement: “This better reflects the cost of regulating the in-house sector and so is fairer.”
The SRA has also announced the 2010-11 funding requirements, which have fallen from the previous year’s total of £122.2m to £121.7m. In addition, the SRA will collect around £2.1m for the Compensation Fund, although this will continue to be split evenly between private practice and other lawyers.
Guidance issued by the SRA said that UK law firms with foreign branches will be charged a “small flat fee in relation to each foreign branch” to cover the cost of the SRA’s regulation.