Unnecessary and overzealous regulations raises costs and stifles innovation in smaller law firms, according to the Legal Services Board.
Research carried out by the super-regulator based on 34 interview and 101 surveys of key industry figures showed that regulators could do more do ease the burden of unecessary duplication of regulatory practices.
The report also stated that the Solicitors Regulation Authority’s assessment of business and financial risks merely echoes the actions of lenders and insurers, giving adequate scop for simplifications that were not being applied.
“The decision by the SRA to introduce risk based outcomes focused regulation was consistent both with regulatory best practice and the LSB’s requirements. Far more importantly it was in the interests of consumers and the diverse range of excellent firms operating in this market. A rules-based, one-size-fits-all approach, is not in the interests of firms or consumers and is simply unsustainable.”
“There is more for the SRA to do to unpick the highly prescriptive and costly rules-based systems it inherited from the Law Society; and the SRA will continue to complete that work. Unfortunately this research, is of limited value to that important work.”
– LEgal Services Board spokesperson
Thousands of small businesses across the UK were found to be struggling with complying to the current “complex and not-self-evidently coherent” set of regulatory requirements.
“It has the potential to divert non-trivial amounts of the key resources of small practices (the time, attention and cognitive effort of the proprietors or partners) from other matters, such as the practice of law and the training of the next generation of lawyers.” – Official Legal Services Board
The full report is available here.