The Solicitors Regulation Authority wants 29% more of the profession’s money next year. Sarah Rapson, the impressive new chief executive, says she knows this will not go down well. She is right, but for the wrong reason. The trouble is not the bill. The proposed change adds complexity and undermines the profession’s return on investment.
Leonardo da Vinci is reported to have said that ‘simplicity is the ultimate sophistication’. Throwing the profession’s money at the long-failing SRA and hoping it will improve is unlikely to work. The SRA needs to morph from a blunt instrument into something far more sophisticated. Regrettably, the SRA’s well-intentioned plan fails the simplicity test. Few dispute that the regulator needs reform. The proposed cost to the profession includes a budget rising to £111.5m, an extra £100 on every practising certificate, and steps to rebuild the compensation fund. The SRA presents this as the price to achieve a modern, efficient, proportionate regulator.
In 2012, Andrew Haldane, then the Bank of England’s executive director for financial stability, told central bankers at the Jackson Hole symposium that complex financial regulation was failing. It made firms manage to the rules rather than the risk. Regulation, he argued, should be ‘grounded in simplicity, not complexity’. The SRA has proposed going the other way.
Solicitors and their clients need a regulator that does a small number of things exceptionally well: protecting client money; enforcing anti-money laundering rules; upholding honesty; and policing conflicts of interest. These matters destroy public trust when they go wrong. The profession will happily fund them because they boost our collective reputation when well regulated.
On 18 May, the Gazette reported on the huge rise in complaints to the SRA and the adverse impact this has on the regulator itself (tinyurl.com/yspha72f). The publicity around complaints, which the SRA has ruthlessly encouraged over many years, and specifically through the SRA Transparency Rules 2018, coupled with the ease of complaining using artificial intelligence (AI), is likely a dual cause of the spiking figures. This is a trend that will only increase as AI adoption across society grows. The legal ombudsman has similarly been overwhelmed. The solution? Simplify – and stress that the SRA is for serious misconduct matters only, and that those remain exceptionally narrow in scope.
The SRA’s plan adds layers of complexity: new triage; new technology; new ways of working; and new early engagement. The Carson McDowell reviews of SSB Law and Axiom Ince show that the SRA’s processes buckled under their own weight. More than 100 warnings about SSB were filed, classified and overlooked. Client money disappeared at Axiom Ince and PM Law. The SRA says it needs more capacity. The information was there in each case; the judgement within the SRA was not. More spending will not fix that.
Good judgement requires clear information and a focused approach. Complexity obscures clarity.
Cautionary tale
For nearly a decade, the SRA has invested heavily in anti-money laundering (AML). Audits and prosecutions have multiplied.
Yet the focus has drifted almost entirely on to technical breaches: missing risk assessments, incomplete matter risk forms and gaps in source-of-funds documentation. Each of these steps matters, but none of them is the point.
The critical point is whether the profession is being used to launder money. The SRA spent so long building complexity under the prior leadership team that it lost sight of the underlying issue: is money being laundered by this transaction?
The government inevitably drew the obvious conclusion. AML supervision in the legal sector is moving to the Financial Conduct Authority, which HM Treasury describes as ‘an improved and simplified regime’. That vote of no confidence is a warning that should shape everything the SRA does.
Effectiveness, clarity, simplicity. Not breadth.
Here are some questions for every element of the plan. First, does it affect the risks around client money, AML, honesty, or conflicts of interest? Second, does it produce a clearer regulatory objective, rather than an additional one? Third, if breached, can it be enforced swiftly and proportionately? If yes to all three, fund it and focus on it. If no to any of those three, do not pursue it.
The SRA should investigate far fewer matters and resolve them more quickly. Employing far fewer staff, who are much better trained, would raise standards. Publish fewer consultations, but listen more to the profession to build trust and confidence.
Ms Rapson has been candid that her plans will not go down well and her candour since joining deserves our collective respect, but the diagnosis to add cost and complexity is unlikely to age well. The profession is being asked to pay 29% more to a regulator that, on its own admission, has long since lost the confidence of those it regulates. Paying more for a rehashed menu that adds further complexity to make the SRA appear to be tackling tasks will deepen the public’s and the profession’s disillusionment with the regulator. This looks to be a first misstep from the new regime, but it is only at the consultation phase. The chance to step back, be braver and far more radical still exists.
The SRA is a teenage regulator. To mature into adulthood, it needs to be braver in all it does. We all want the SRA to do better, and the fact that Ms Rapson recognises the historical errors is a huge step forward. Improvements already being felt since
Ms Rapson focused the SRA on a small list of priorities earlier in 2026 are a significant positive, but the overarching plan’s failure to simplify radically should be challenged in consultation responses.
The profession should ask the SRA to do less, do it better and be far smaller in the process. That is what serves the public interest and the profession.
Paul Bennett is a partner at Bennett Briegal LLP. He specialises in legal regulation, compliance and partnership
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