by Nwabueze Nwokolo, chair of the Black Solicitors Network and Law Society Council member, Minority Ethnic Concerns

It is with great pleasure that I take on the role of chair of the Black Solicitors Network. I have campaigned all my professional life for the elimination of any form of discrimination and unfair treatment, and there is much work to be done here.

It is with great pleasure that I take on the role of chair of the Black Solicitors Network. I have campaigned all my professional life for the elimination of any form of discrimination and unfair treatment, and there is much work to be done here.

There remain far too many instances of BME solicitors being treated less favourably, and there are threats to the survival of many BME-led law firms to be faced in the coming years.

Over my two-year term, my broad aim is to ensure that BME solicitors survive the changes brought about by the Legal Services Act – the most radical being the introduction of alternative business structures.

Meeting members and listening to their concerns, I hear uncertainty about their ability to survive. Members highlight: the effects of the economic downturn; the continued reduction in the funding of public legal aid work; lenders’ decisions to reduce panel sizes; the cost of indemnity insurance; inability to obtain PII; and changes to the assigned risks pool.

I have been told that many BME-led firms have either closed down or are in the process of doing so. Solicitors take huge pride in the diversity of their profession and they need to make sure that BME solicitors remain in practice.

Preparing for the futureThe full range of ABSs will be allowed from 6 October 2011 – and BME solicitors should be prepared. We cannot afford to take a ‘wait-and-see’ position, since the future of the next generation of BME solicitors will be determined by how many BME firms survive.

At least 79 sole practitioners closed their firms in the last insurance renewal round. Professional indemnity insurance premiums went down for bigger firms, while the premiums of BME solicitors, who are mostly sole practitioners or partners in small firms, went up. Tenure in the ARP has been reduced to one year, and the Solicitors Regulation Authority means to go ahead with a proposal to reduce the term further, to six months. Statistics from the SRA show that BME firms are overrepresented in the ARP, comprising 41% of firms in the pool.

Poor prognosisThe prognosis for any firm that stays the full term in the ARP is not good at all. Lenders continue to shrink their panels and insurers continue to withhold insurance from firms that: they consider to be under-capitalised; have offices located in postcode areas they dislike; have principals who qualified abroad; are sole practitioners or small practices.

The minimum terms and conditions of our PII are under review and set to change. We are moving into the era of separate instructions of solicitors for borrower and lender in conveyancing transactions. The perceived direction of the proposed SRA Handbook, presently out for its second consultation, reveals that outcomes-focused regulation is the future, predicated upon a principles-based (as opposed to rules-based) approach.

Accordingly, it is proposed that firms will have compliance officers, and robust risk and office management systems. These all seem to be good measures, but are expensive and appear to be designed with larger firms in mind. Although the cost of an individual solicitor’s practising certificate has gone down considerably, a legal entity of whatever size still needs to pay the entity fee. There are many overhead costs in the proposed new system that could cripple a sole practitioner or a small firm.

The SRA has recently issued guidelines on how to prepare for the introduction of ABSs without jumping the gun. I would urge all BME solicitors who are proprietors of their firms to take a look at these guidelines. ABSs may well turn out to be a damp squib, but we cannot afford to be taken unawares.

We must lead the charge, and not follow in the wake of others who are not as well equipped as solicitors to provide and deliver legal services.

Nwabueze Nwokolo is chair of the Black Solicitors Network and Law Society Council member, Minority Ethnic Concerns