Welcome to this edition of LSB news.

This latest edition of the newsletter serves two purposes. One is to update you on some of our recent initiatives. The other is to introduce those of you who are new Members of Parliament to the Legal Services Board and what it does.

In this edition, we highlight our recent paper explaining the strong case for reform of the Legal Services Act 2007, and possible options for that reform. This is particularly timely given the Lord Chancellor’s announcement to the Justice Select Committee of his expectation that there will be a review of the Act during the lifetime of this Parliament.

This issue also includes information about:

• the legal services regulators’ collective response to the Government’s drive to reduce regulation and promote growth;
• two of our recent research projects – the first, outlining how changes in regulation are enabling innovation in the legal sector and the second into consumers’ experience of online divorce services; and
• the welcome dismissal by the Supreme Court of the legal challenge to the Quality Assurance Scheme for Advocates.

In late July, the Legal Services Board published a paper explaining the case for reform of the Legal Services Act 2007 (the Act) and exploring options for such reform.

The paper, which has been shared with Ministers, describes some of the choices ahead and the regulatory tools that are available, to inform further debate and discussion.

LSB Chair, Sir Michael Pitt, said upon publication: “Regulation has the potential to make a very real contribution to unlocking growth, increasing productivity and addressing the significant unmet need for legal services. To do so, the regulatory framework must be more efficient and effective in seeking to promote strong and fair competition. It has to be capable of responding to rapidly changing conditions in the market whilst also maintaining necessary protections for consumers and the public interest.”

Without attempting to provide definitive answers or positions, the paper considers a core set of issues that could frame possible future reform, such as:

• the case for fundamental change to the Act including what should be regulated
• the rationale for sector-specific regulation
• the dynamics and tension between regulation of activities, individuals, entities and titles
• regulatory independence, and
• the shape of the regulatory infrastructure.

The Legal Services Board published in July the collective response of the legal services regulators* to the cross-economy drive to find more opportunities for deregulation.

This response is in three parts. A status report outlining progress on deregulation highlights the extent of regulatory reform since the Legal Services Act 2007 (the Act) was introduced such as increasingly simplified processes, the removal of barriers to market entry, enabling innovation among new and existing providers, and improving consumer choice and competition.

The minor changes to the Act report identifies a number of further opportunities for deregulation which would contribute to reducing burdens on practitioners and freeing up the market to deliver economic growth.

And finally, the alternatives to handling client money report explores what options there might be for practitioners who no longer want to handle client money, thereby creating scope for more choice for practitioners, reduced consumer harm and lower regulatory burdens.

Together, these regulatory improvements would support growth and innovation in legal services, allowing the professionalism of individual lawyers to thrive and new businesses to grow.

*The regulatory bodies who contributed to this response are the Bar Standards Board, CILEx Regulation, the Costs Lawyer Standards Board, the Council for Licensed Conveyancers, the Faculty Office, the Institute for Chartered Accountants in England and Wales, the Intellectual Property Regulation Board, the Legal Services Board, and the Solicitors Regulation Authority.

The largest ever study of innovation in the legal sector, commissioned jointly by the Solicitors Regulation Authority (SRA) and the LSB, suggests that legal professionals are taking advantage of changes in regulation to become more innovative in the organisation and management of their businesses, and in the services on offer to consumers.


The research found that:

• alternative business structures (ABS) are between 13-15% more likely to introduce new legal services than other types of regulated solicitor firms
• over a quarter of all providers have introduced a new service in the last three years
• 80% of legal organisations feel that they have a culture and leadership which is open to new ideas
• 40% of organisations have put in place organisational procedures to support innovation and the development of new ideas
• changes to regulation to allow space for innovation have resulted in increases in the range of services on offer, with barrister chambers frequently citing direct access work as an example of this
• a majority of providers see regulation as broadly neutral to positive for innovation but there are some areas where providers believe regulation has a negative impact on innovation such as client accounts and client complaints.

The Legal Services Board, together with the Legal Services Consumer Panel (LSCP) and the Legal Ombudsman (LeO), is heading to Leeds in November.

The LSB will hold its second Board meeting outside London, and its first in Leeds, on the afternoon of 26 November.

This will be followed by an event hosted jointly by the LSB, LSCP and LeO for the Leeds legal community, and local citizen and consumer groups.

The event will focus on the work of the three bodies, who will each outline their respective priorities and issues of interest, along with a question and answer session.

All who wish to attend are welcome, and details of registration can be found here.

In late March, the LSB and the LSCP published joint research comparing the consumer experience of using online divorce with more traditional services.

Online delivery of services is already widespread in many areas of the economy. Delivery of legal services is also predicted to become increasingly digital.

Some of the findings from this research, entitled "Comparing methods of service delivery: A divorce case study", include:

• consumers are making choices to reflect their needs: those using online divorce services tend to have more amicable (86%) divorces compared to those using a traditional lawyer (56%)
• online divorce services are reported to be significantly cheaper and more likely to be quoted on a fixed fee basis
• online applicants go through the process faster than those seeking face-to-face advice (on average 83% within eight weeks), and
• more users of on-line services than traditional services felt that the process was easier than they anticipated and involved less effort.

The legal challenge against the lawfulness of Quality Assurance Scheme for Advocates (QASA)* is now at an end. The Supreme Court dismissed the latest appeal against the lower courts (High Court and the Court of Appeal) rulings on 24 June. The Supreme Court concluded that the objectives of protecting consumers and other recipients of criminal advocacy services and the sound administration of justice justified the need for the Scheme. It also agreed with the Court of Appeal “that a comprehensive assessment scheme was proportionate, and that the Board was entitled to grant the application of the BSB, SRA and IPS [now CILEX Regulation]”.

Following the ruling, Sir Michael Pitt, Chair of the Legal Services Board, said: “My firm expectation, now that we have clarity on legality, is that the regulators in Joint Advocacy Group [JAG] will proceed with implementing the scheme to assure the public of the competence of criminal advocates.”

* QASA is an assurance scheme intended to address the issue of substandard advocacy in the criminal courts in England and Wales.

On 3 June the LSB confirmed statutory arrangements agreed with the Office for Legal Complaints (OLC) to enable improved performance reporting.

The OLC is the Board of the Legal Ombudsman scheme and is responsible for its effective administration, including performance.

The LSB and the OLC have an open and constructive relationship and the new reporting requirements enable us to take a collaborative approach to identifying new risks, both to performance of the scheme and to consumers and the profession should they emerge.

The expectation of the LSB is that these new arrangements will sit alongside the OLC’s existing scrutiny of the Legal Ombudsman scheme performance.

More information can be found here.

3 September

LSB approves SRA’s application to change accountants' reports and overseas rules

26 August

LSB approves BSB application to change its complaints regulations

25 August

LSB approves BSB application for changes to the Cab Rank Rule

24 August

• LSB approves Faculty Office application to change its conduct and discipline rules
• LSB approves CLC’s 2015/16 practising fee application

13 August

LSB approves SRA’s 2015/16 practising fee application

29 July

LSB publishes report on regulation of in-house lawyers

28 July

• LSB approves changes to CLC’s rules as a consequence of 2015 Deregulation Act
• LSB approves SRA’s changes to the Separate Business Rule

24 July

Faculty Office 2015 practicing certificate fee approved

7 July

LSB and SRA publish joint research into the state of play of innovation in the legal services sector.

19 June

LSB confirms details of statutory arrangements agreed with OLC to enable improved performance monitoring

9 June

LSB annual report 2014/15 laid in Parliament

22 May

LSB writes to all regulators asking them to continue to monitor the area of price transparency to ensure good consumer outcomes are secured

14 May

LSB launches survey of legal services regulators performance

24 April

LSB approves changes to SRA’s regulations re. the regulation of insolvency practice

27 March

LSB announces new members of the Office for Legal Complaints

26 March

LSB publishes its 2015-18 strategy and its 2015/16 business plan

25 March

LSB issues second report on regulators' progress on diversity and social mobility data collection and transparency.

19 March

LSB and LSCP issue joint report comparing the consumer experience of online divorce with more traditional services

12 March

MoJ / LSB announce new appointment to the Board of the LSB

25 February

LSB publishes update report on the regulatory standards performance of the frontline legal services regulators

Want to get in touch?

Legal Services Board
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WC2B 4AN

Web: www.legalservicesboard.org.uk
Email: info@legalservicesboard.org.uk
Tel: 020 7271 0050
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You can also get in touch with the Legal Services Consumer Panel, which advises the LSB on consumer issues, here.