Demand for funding to help with the costs of renewing practising certificates has doubled this year, a lender has revealed.
Finance provider Syscap said nearly 20% of the value of all law firms’ renewals so far this year have been paid for through loans, compared with 10% during last year’s renewal period.
Firm fees are calculated using their turnover for the last year, with a flat compensation fund fee of £836 on top if the firm holds client money.
‘Practising certificates are becoming a bigger burden on firms’ finances,’ said Philip White, chief executive of Syscap. ‘The renewals period is now a very serious pinch point.’
The total regulatory funding requirement for 2013/14 is £116.8m, up from £103.5 collected last year. The increase is largely due to the need to replenish contingency funds.
White said the ongoing economic issues facing many firms exacerbate the funding problem, with the SRA needing to make more interventions and trying to minimise the fallout.
‘Those firms that remain are now shouldering a bigger burden of regulatory costs while facing the same financial headwinds that have forced others to the wall,’ he added. ‘There is a real danger that those increased regulatory costs could drag down some weaker firms in the future.’
The deadline for applying for a practising certificate renewal is 31 October, with the SRA prepared to take regulatory action against any firms that miss it. Last year 3,500 solicitors had their licences revoked after failing to renew their PC.
Last year Syscap, the Law Society’s endorsed finance provider, received more than 1,800 applications for funding for PC renewal.