Double standards

Mike Haley only intended to provide reassurance but his words misfired. The Solicitors Regulation Authority's supervision director was here to build trust between his organisation and the profession, he told delegates at CLT's financial stability conference last week. He wanted to encourage lawyers to be confident about being more open with the regulator, self-report early signs of financial difficulty more readily, and be prepared for the worse so that orderly wind down could be organised if necessary.

Nothing that, in the main, those in the room wouldn't have expected. But as Haley later sought to provide further clarification about why he was there, he said it was not to check up on who was attending, an explanation that seemed to be based on the assumption that only firms in financial difficulty would. There was a furtive exchange of glances across the floor. Was that really what the SRA thought, that lawyers would come to a financial stability event because they were in trouble?

Nobody previously had cause to believe that senior SRA executives speaking at conferences were there on an undercover mission to catch people out. They're not.

They're there to explain their role and actions, and to hear from law firms, and that's perfectly normal and should be encouraged as part of their engagement effort.

But Haley's peace offering left a vaguely unsettling feeling. It played on fears that receiving a letter from the SRA instantly puts you on alert even when you should have nothing to worry about. This was not helped by the fact that Haley mentioned how, in several cases, the SRA had found out about a firm's problems not from self-reporting but "from chatrooms and blogs".

In truth, Haley can't be blamed for that. It's the regulator's job to find out about these things by any lawful means. The frustration for law firms is that while senior SRA personnel may be suitably qualified to have constructive conversations with lawyers, too many of the ground staff appear simply unable to engage at the required level.

This summer 1,300 firms received a letter asking for financial information within a fortnight. No reasons were given and no explanation about what the SRA would do with the data. Some firms tried to engage with the SRA and explain why some of the criteria or requests were not applicable. To no avail.

Haley accepted with refreshing openness that the financial literacy of some staff was perhaps not as high as it should be. And to his credit he offered help to firms that raised specific concerns.

But for a regulator which is asking so much of law firms, that is not acceptable. Solicitors will understand that the SRA, like any organisation, will have its ups and downs. What is not acceptable is for the regulator to expect law firms to respond to letters within a fortnight when its own staff cannot act with the same diligence, or, more generally, engage with highly qualified legal professionals at their level. SJ

 

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Jean-Yves Gilg is editor of Solicitors Journal

jean-yves.gilg@solicitorsjournal.co.uk