The Law Society is this week consulting on a hefty cut to its budget as part of a £4m member support package put together in response to the Covid-19 crisis. Chancery Lane plans to reduce its call on the practising fee by 10% in 2020/21.
Regulators including the Solicitors Regulation Authority, together with levies, currently account for over 70% of the annual practising certificate fee paid by members. The representative Law Society at Chancery Lane takes under 30%, equivalent to about £30m.
The Society has stressed that now more than ever, Chancery Lane is acutely aware of its obligation to spend prudently to support the profession, firms and individual members through challenging times for the legal sector. It is therefore consulting members on a £3m cut to its part of the PC fee in 2020/21.
The consultation includes increased funding for the Solicitors Regulation Authority, Legal Services Board, Financial Conduct Authority and Legal Ombudsman, suggesting that in 2020/21 the PC fee will be flat overall.
In each of the last six years, the individual practising fee has reduced or frozen at the same time as absorbing inflation. In 2020/21 the proposed individual practising certificate fee is frozen at £278.
A spokesperson for the SRA commented: ’The establishment of the SRA as a distinct legal entity requires some accounting adjustments to be made. The result in an increase of £0.7m in the SRA NFR, but an equivalent £0.7m drop in TLS NFR. So the effect on the PC fee of the SRA’s increase is neutral. Beyond the accounting adjustment, the underlying NFR for the SRA remains the same as last year.’
Separately, the SRA has announced that contributions from the profession to the Compensation Fund for the next practising year will fall.
The individual contribution for 2020/21 will be £50 (reduced from £60 this year), while the firm contribution will be £950 (down £200 from £1,150). These figures are subject to final SRA Board and Legal Services Board approval.