The peer tasked by Chancery Lane with reviewing legal regulation says that only ‘minor’ adjustments to the Law Society’s internal governance may be required to yield ‘enormous benefit’ for the regulation of law firms.

Lord Hunt of Wirral wants to see a system of regulation emerge which ensures ‘parity of esteem’ between the ‘two pillars’ of the Law Society – the representative body at Chancery Lane and the Solicitors Regulation Authority.

Hunt stressed that the model for statutory, profession-led regulation enshrined in the Legal Services Act 2007 must be made to work. The alternative, he pointed out, is ‘ominously’ quoted in the Legal Services Board’s business plan for 2009/10 – ‘wholesale statutory regulation, with a progressive loss of public confidence in the concept of a profession’.

Structural issues must be resolved swiftly, he said, so the focus shifts to ‘questions of greater substance’.

Hunt’s preliminary report largely avoids firm conclusions but contains significant pointers in respect of his thinking. He admitted to being ‘inundated’ by responses.

Commenting on Nick Smedley’s complementary report on the regulation of corporate firms, Hunt does not say which model he prefers. However, he says he is ‘inclined to agree’ with the Smedley finding in March that a completely separate regulator for corporate firms is not desirable (see Opinion).

Elsewhere, Hunt says he may recommend that alternative business structures initially be subject to the same ‘rigorous’ regime as corporate firms. He may recommend that a new body be set up to deal with complaints against the SRA, that the Solicitors Disciplinary Tribunal should speed up its processes, that the SRA should develop a ‘compliance toolkit’ for firms, and that there should be a single code of practice for the regulatory arm and a single code for the representative arm.

Hunt said his final report may recommend that the SRA should extend the role of pre-emptive and advisory visits, especially to firms deemed to be ‘at risk’.

In the second and final phase of his consultation, Hunt says he will consider whether regulation could be extended to cover will-writing, probate work, certain commercial work and certain types of legal helpline.

Hunt will discuss his preliminary report in a series of roadshows, beginning in Manchester tonight.

Commenting, Law Society president Paul Marsh said: ‘We are grateful to Lord Hunt for his interim response which will continue to stimulate fresh thinking and ensure the profession continues to maintain its high ethical and professional standards in a changing business and customer environment.

‘I look forward to hearing the debate at the roadshows as Lord Hunt discusses the future regulation of solicitors with practitioners up and down the country.’

SRA board chair Peter Williamson said: ‘We are pleased that Lord Hunt recognises that public confidence depends upon demonstrable separation between the representative function of the Law Society and the regulatory work of the SRA, and "parity of esteem" between the regulator and the representative body.

‘Unfortunately the Law Society’s recent decision to press ahead with arrangements for appointments to the SRA Board, despite the fact that those arrangements fall significantly short of the public interest criteria on which the Legal Services Board is currently consulting, was in our view a serious mistake and symptomatic of the unsatisfactory nature of the current governance arrangements.

‘We hope that the Legal Services Board’s forthcoming rules will establish a more robust set of arrangements which can command the confidence of both the public and the legal profession.’