Lack of communication at the SRA means flexible regulatory system is all at sea, says Andrew Hopper

It all looked so promising. When 'outcomes focussed regulation', or 'OFR' as it came to be known, was first brought in by the Solicitors Regulation Authority (SRA) with the new Code of Conduct in 2011, it looked like a far more sophisticated, grown up way to manage an established profession of bright, able people than we had seen before.

Lawyers looked forward to an end to the pettifogging, tick-box approach to regulation of its predecessor and the start a more mature, adult-to-adult relationship between regulator and regulated.

They would work together, rather than as adversaries. And together they would navigate the new territory in the post-Legal Services Act (LSA) world, as new types of alternative business structure (ABS) would be explored now that the market allowed them – indeed in some cases demanded them, as the competitive landscape for legal services businesses in some areas started to change beyond recognition.

But sadly it was not to be so. The reality has simply not matched up to the dream. In fact it has fallen a very long way short. In essence, the people on the ground implementing the new regime seem to have no idea whatsoever about this enlightened strategic thinking at the top of their organisation.

There is a total disconnect. And equally, the senior bods at the top appear to be unaware how it is going so wrong on the ground.

Exercise judgment

OFR means that law firms are being asked to exercise their own judgment far more than under the previous regime. The whole idea is that rigid adherence to inflexible rules is out and firms having flexibility to develop new types of services more finely-attuned to client need, rather than a one size fits all approach, is in.

Surely it is only reasonable that if they don't get it quite right on first try, and as long as their efforts to get it right were genuine, then they should be given constructive feedback and assistance – rather than being penalised?

Stands to reason doesn't it? Apparently not, if the evidence of how the over-zealous foot-soldiers of the SRA are going about the task is anything to go by.

I have seen prosecutions for minor transgressions which should never have seen the light of day – and which would have been far better, more simply and less expensively dealt with through conversation, the SRA giving feedback and a bit of direction and guidance as to how to put things right.

On some occasions I have been able to have a word myself on a firm's behalf with someone in a senior role at the SRA, as a result of which common sense has finally prevailed and a pointless prosecution been dropped.

But the damage is often already done, even by this point. (And it goes without saying of course that a fair and just system should never have to rely on such interventions to compensate for a lack of communication between one end of a regulating organisation and the other.)

At the heart of the problem is a system containing so much grey, being policed by individuals who only think in black and white.

And the consequences for firms and individuals alike can be harsh: unfair prosecutions, unwarranted damage to reputations and businesses, not to mention the personal frustrations, the stress and the sleepless nights for the individual lawyers concerned.

And of course the problem goes back some way. The SRA has suffered from a trust deficit almost from its inception. Indeed one of the drivers behind the switch to OFR was that the organisation itself recognised that it had been a heavy-handed regulator, renowned for acting disproportionately against well-meaning firms.

It embarked on a major retraining exercise to change its internal culture and instil a different mindset in its staff. Clearly this hasn't worked.

'Proportionate'

Above all, the SRA was keen to reposition itself as a 'proportionate' regulator and to build bridges with the profession and improve its relationship with firms. Clearly this hasn't worked either.

In fact, matters have worsened as firms have found themselves caught between having less direction from the senior end of the regulator (being expected to exercise their own judgement far more) and the narrow-minded policing on the ground.

There is something very wrong with a system where firms and lawyers are in danger of suffering significant detriments as a direct consequence of a fatal disconnect between the strategists and the implementers in the regulating organisation.

We hear few complaints only because lawyers understandably don't want to incur the wrath of the body on which they depend for their licence to practise. Someone has to speak out on their behalf. And something most definitely must be done.

Andrew Hopper is a solicitor QC and a door tenant at Farrar's Building. He is co-author of The Solicitor's Handbook and also the Guide to Outcomes-Focused Regulation, both on the subject of regulation, one written from the perspective of the practitioner, one from that of the regulator.