Our first Board meeting after the summer break was a valuable opportunity to take stock and consider the progress being made to address the challenges set out in the Reshaping Legal Services strategy and the areas we want to focus our attention on in 2023/24. We held a strategy session in which we considered a wide range of evidence and data about the sector, reflected on insights offered by stakeholders and discussed where regulation could enable fairer outcomes, better services and stronger confidence.
We reflected that several projects and areas of work have recently concluded and that a key focus in 2023/24 was to monitor their impact and ensure they are delivering in the public and consumers’ interests. We are committed to building on the work we have started and maintaining the scale of our ambition and the pace of progress.
Taking stock: our first 18 months delivering the strategy
We started with a focus on what regulation has achieved in the first 18 months of the strategy. We noted some welcome consumer trends in our review of the latest data. The Legal Services Consumer Panel’s 11th annual tracker survey shows that the proportion of consumers shopping around for legal services has risen from 30% to 43%. 75% said they found it easier to compare prices, up from 59%.
More people are using legal expenses insurance, and there has been a marked increase in consumers using digital comparison tools. We also noted increased public trust and consumer satisfaction with legal services provided.
The Covid-19 pandemic has undoubtedly led to changes in consumer behaviour. However, regulatory initiatives also have an impact, and we remain of the view that our strategy is the right one.
However, there is still more to be done.
Driving up regulatory performance to raise standards
For example, implementing the revised regulatory performance framework will be a key priority in 2023/24. We are working to strengthen the regulatory performance framework so that we can assess in greater detail the work of the regulators to meet the challenges set out in the strategy. We are also reviewing regulators’ enforcement and disciplinary processes to ensure they are fit for purpose.
Through the revised framework, we will ensure that the statutory policy statement on consumer empowerment that we published in April is embraced by the regulators and leads to better outcomes for consumers. We expect regulators to implement effective programmes of activity to support public legal education, focusing on activities that support people to understand when they have a legal problem and how to access the professional help they need to resolve it. This includes, for example, contributing to cross-sector initiatives like the Legal Choices website to increase public understanding of the citizen’s legal rights and duties.
We will also need to work with regulators as they embed the principles our ongoing competence statement of policy, which should meet the challenge of ensuring high-quality legal services and strong professional ethics. Consumers should be able to trust that legal professionals have the necessary skills, knowledge and attributes to provide good quality legal services and that they are kept up to date and relevant over time.
Ensuring the outcomes in these policy statements are met will be a key focus for us in 2023/24 and beyond.
Putting consumers first and reducing vulnerability
In our review of the latest data, we noted that addressing unmet legal need continued to be a challenge and priority. Following our research on the legal needs of small businesses, which showed that around one-third (32%) of small businesses experience a legal issue annually, we will continue to make a case for a legal support strategy to help small businesses access legal services when needed.
This is an example of how we use research to inform policy decisions and influence change. Next year, we intend to carry out a new Individual Legal Needs Survey that will give us further insight into where we need to focus attention to ensure legal services work better for individual consumers.
We also discussed the need to use the insights from our recently published research on the vulnerabilities consumers face when they need and use legal services to inform our work to ensure that legal services are designed and delivered with vulnerabilities in mind. We expect this to be a focus for our work next year. We will also be continuing our work on financial protections for consumers.
New data on gender pay reinforces the need for EDI action
The Board’s discussion of EDI data led to us reaffirming the need to maintain the pace of our work in this area. More precise data on the gender pay gap, specifically within legal services (rather than merged with accounting services), highlighted a larger problem, boosting the median pay gap from 25% to 34%. This compares to the UK average across all sectors at 15%. We agreed that this was of significant concern, and action to address this should be within regulators’ sights.
In 2023/24, we intend to set clear expectations for the regulators on equality, diversity and inclusion.
Looking to the future
The Board discussed developing more enhanced horizon scanning and adopting a market surveillance approach so that we can best anticipate and respond to risks to reshaping legal services.
We noted that discussing future risks to the sector was impossible without considering climate change and environmental sustainability. We shared concerns about the contribution our profession might be making to climate change and reflected on whether there might be a role for legal services regulation in addressing the problem. It was suggested we might want to commit to some preliminary scoping work next year.
We will also continue our work to promote regulators fostering innovation and responsible use of technology. Our research on the social acceptability of technology confirms that consumers have a greater appetite to use technology than the legal profession tends to assume and that this can support access to justice.
Budget for 2023/24
We are funded by a levy on the sector and are mindful of the need to deliver value for money and maximum impact as we seek to reshape legal services. We had an early discussion about our budget for 2023/24, and front of mind was the wider economic landscape, including increasing inflation, which will mean some of our costs will increase.
We have made good progress in the first 18 months of delivering our strategy, and we don’t want to rest on our laurels. So we need to think carefully about our budget next year, balancing the economic outlook of the sector with the need to ensure the legal services system works better for people who need it.
We will consult on the draft business plan and proposed budget for 2023/24 in December 2022. The Board will agree on the final business plan and budget in March next year.
Our next Board meeting is on 18 October 2022.