Firms to officially meet bulk of practising certificate fee

Law firms will pick up 60 per cent of the practising certificate fee from October this year under proposals put forward by the Solicitors Regulation Authority.

The SRA board agreed at its latest meeting that solicitors will pay a 'much reduced' individual PC fee of about £460, with firms paying a separate fee based on turnover.

Under this new hybrid mechanism, the overall fee for a firm with 45 fee earners and a £6m turnover will be £53,115.

This would include £23,400 from the fee earners '“ or £520 each '“ and £29,715 from the firm '“ or the equivalent of £660 per fee earner.

In addition, all fee earners will be required to contribute £10 each to the Compensation Fund, and the firm £150.

On the basis of last year's PC fee, which was £1,180 per solicitor, the 45 fee earners at the same firm would, together, have paid out £53,100.

The new mechanism is still subject to approval by the Legal Services Board, which is expected to make a decision next month.

The final amount will also depend on the Law Society deciding on the total funding requirement for next year.

The change is part of the wider move towards firm-based regulation under the Legal Services Act.

According to the regulator, the banding of firms based on variable volume of work will more closely match the responsibility for payment with the 'ability to pay' principle.

Most firms usually pay for their fee earners' PC fee but the SRA says the new model will reflect more accurately the fact that most of the regulatory activity relates to firms rather than individuals.

The SRA sent letters to firms earlier this month detailing the likely fees.

Russell Conway, senior partner at Oliver Fisher, a nine-lawyer firm in London, received his letter and said the figure was 'roughly the same as last year'.

Most other firms Solicitors Journal spoke to said the amount was comparable or represented a saving, ranging from £3,000 to £11,000.