Compliance costs are hurting our businesses, solicitors say

The proportion of law firms describing compliance costs as "harmful" to their businesses has risen to almost 60 per cent, a Law Society survey has revealed.

The survey of 1001 firms was carried out this winter, following the introduction of OFR.

Previous surveys had shown, in 2009, that 42 per cent of firms felt that compliance costs were hurting their businesses, rising to 51 per cent in 2011 and 58 per cent in the latest survey.

Firms saying the compliance costs created an increasing administrative burden for fee-earners rose to 81 per cent, from 68 per cent the previous year.

However the number stating that these costs led them to turn clients away or reduce the range of their services fell.

Law Society researchers found a large fall in the number of firms saying they were satisfied with their relationship with the SRA, which fell to just over a quarter, or 27 per cent. This is the lowest proportion since the society's survey began in 2007.

"Our members are clear that the current regime places too great a burden on firms," Des Hudson, chief executive of the society, said.

"The cost of compliance is a major concern. We are listening, and will do all we can to help ease the burden.

"The society already provides advice and support for members to help them through the ongoing changes but as the latest survey indicates, our members remained concerned."

A telephone survey by the SRA of 1,000 solicitors in February reported that two thirds of solicitors believed that complying with OFR took more time than the previous system.

SRA chief executive Antony Townsend said: "The results of our own survey into the profession's views, one year after the launch of OFR, suggested that complaints about regulatory burden and the cost of regulation could be attributed largely to the 'one off' costs and extra administration required by the change of regulatory approach.

"We believe that these will ease as OFR beds down, leading to a reduction in the burden for well run firms.

"Nonetheless, we recognise the pressures upon firms, and we are committed to streamlining our processes and reducing costs wherever we can."