At a time of growing financial hardship, solicitors need access to as many legitimate channels of income as possible.

A fortnight ago this column observed that few subjects in the Gazette’s ambit generate such impassioned opinions as regulation. One that certainly does is referral fees. Such arrangements remain deeply controversial and that controversy is certainly not going to abate following our disclosure of rising levels of non-compliance (see p1).

The figures make grim reading. A third of firms had failed to disclose to clients their financial arrangements with the work introducer. And nearly a quarter of referral arrangements reviewed by the Solicitors Regulation Authority were not set down in writing. It is straining credibility to believe that no payment or other consideration was involved in many of the latter cases.

Earlier this year, the SRA board renewed efforts to cut down abuse of the referral fee rule, while leaving the door open to reimposing a ban at a later date if those efforts proved unsuccessful. Of course, genies are notoriously difficult to put back in bottles and, at a time of growing financial hardship, solicitors need access to as many legitimate channels of income as possible.

It is clear, nevertheless, that the profession needs to raise its collective game if the possibility of a ban is not to return to the table. We recall the ominous words of SRA board member John Stoker last December: ‘We may in time have to take decisions based on principle and not pragmatism.’