Free us from the fees!: Solicitors aren’t pleased with Practising Certificate fees
September 6, 2020
3 min read
What's going on here?
In a recent consultation, two-thirds of solicitors did not consider their Practising Certificate fees to be good value for money.
What does this mean?
Solicitors practising in England & Wales must hold a Practising Certificate (PC), the rate for which is currently set at £338 a year by the Law Society and Solicitors’ Regulation Authority (SRA), and approved by the Legal Services Board. This fee pays for the Legal Services Board, Legal Ombudsman, Solicitors Disciplinary Tribunal, Law Society, and the SRA). The PC fee raises around £40m a year, with an additional fee on law firms raising another £60m. Of this £100m, approximately £55m goes to the SRA and £30m goes to the Law Society.
The Law Society and the SRA have kept the fee stable for the past three years and have applied for a freeze for a fourth year as well. However, in the consultation that preceded application for the fee freeze, 67% of the 224 respondents expressed dissatisfaction with the fee, with only 24% of respondents considering the fee good value for money.
Respondents found the fee too onerous for sole and part-time practitioners and took issue with the lack of adjustment for solicitors whose practices have been most affected by COVID-19. Lower fees for practising licences have been implemented by the Bar Council and Bar Standards Board, as well as the Scottish Law Society, leading many to question why the Law Society hasn’t followed. It is also well-documented that a fall in demand during lockdown has left some junior solicitors struggling to make ends meet.
What's the big picture effect?
Aside from the displeasure at the lack of adjustment for different solicitor circumstances, there is a debate on whether revenue from the PC fees has been used optimally. Some respondents to the consultation want to only have a mandatory fee for “core” activities, such as the SRA’s investigations into solicitor misconduct, with “peripheral” issues, such as the Law Society’s market research, participation in legislative reform and networking with other organisations, covered by an optional contribution. Moreover, the Law Society still fails to publish a detailed breakdown of its budget, using umbrella terms such as “corporate strategy and performance” to describe millions of pounds’ worth of spending.
Supporters of the PC fee point out that inflation has caused it to fall by 20% in real terms since 2015. Further, Law Society President Christina Blackwell has said that a significant increase in solicitor numbers over the past decade has allowed for the fee to be held steady, as have cost-cutting measures such as the sharing of back-office services with the SRA. Meanwhile, the SRA has defended the fees by pointing to, among other things, its investments in anti-money-laundering and IT modernisation, as well as other “core” activities like investigating and shutting down non-compliant law firms.
Complaints about the fee are regularly defended by the Law Society with little change being offered to pacify unsatisfied solicitors. One solution to the complaints could be the creation of a needs-based exception to the PC fee. Another could be to place a greater proportion of the overall fee burden on law firms instead of their employees – currently, a law firm is expected to pay for 60% of the fee, with the remaining 40% being covered by the individual. Though this debate arises annually, will the extra pressure of COVID-19 finally push the Law Society to change the PC fee structure?
Report written by Darinka Lipovac
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