Legal News

Corporate legal work: report calls for changes in regulation

 Major change is needed in the way corporate legal work is regulated, according to an independent report published on 26 March. The report follows a review carried out by Nick Smedley, formerly a senior civil servant in the Ministry of Justice, who was commissioned to undertake the work by the Law Society.

The report has been presented both to the Law Society and to Lord Hunt of Wirral, who is carrying out a wider ranging review of the way solicitors are regulated.
“Regulation of corporate legal work is in urgent need of modernisation,” said Smedley. “The current arrangements for regulating this vital sector of the UK economy and legal services sector are not robust enough. Without rapid change it is impossible to conclude that the current regulatory arrangements are fit for purpose.”
The report concludes that there is a need for greater expertise and understanding at the SRA [Solicitors Regulation Authority], for greater engagement with the profession and its clients and for a sophisticated regulatory approach which recognises the differences between different parts of the solicitors’ profession. It is important to regulate to avoid failures rather than deal with failures after the event, says Smedley.
“There are many lessons to learn from recent experience at the FSA, including the importance of outcome-based regulation, maintaining an eye on the strategic picture rather than individual transactions in firms and involving practitioners and supervisors in the oversight arrangements. My aim is to capitalise on the very high ethical standards already prevailing in the solicitors’ profession and support that with the most up-to-date thinking on regulatory structures and regulatory purposes.”
“The SRA has a huge task in responding to these challenges and need to demonstrate that they are open and constructive in how they take my report forward. Corporate firms and clients are very willing to help and their offer should be welcomed. There is a lot of good will, expertise and informed thinking available to assist the SRA, so long as it remains open to innovation and a real commitment to address the issues.”