Chair’s Blog – September 2021

Our first Board meeting following the summer break (21 September 2021) gave us an opportunity to take a step back and reflect on some of the current issues facing the legal services sector and consider the progress being made to deliver the ambitions set out in Reshaping Legal Services – our strategy for the sector. This provided a backdrop to an early consideration of priorities for our business plan for 2022/23 ahead of a public consultation later this year.

Taking stock to drive positive progress for consumers

The impact of Covid-19 on the profession and people who need legal services continues to be front of mind. As our Covid-19 impact dashboard shows, the sector has seen record turnover, fuelled mainly by the corporate sector. However, some parts of the sector, often those serving sections of the public with the greatest need, have been hit pretty hard, with the pandemic compounding pressures that have been growing for many years.

The Board is clear that this makes it all the more important to continue to focus on connecting legal services more effectively to the people who need them, which is at the heart of our sector-wide strategy. We can all do this by, for example, understanding wider barriers to access – including but extending far beyond cost or perceptions of cost – and how those barriers might be overcome.

While by no means a panacea, technology offers one means of overcoming those barriers, for example, by making services more convenient, cheaper, and allowing legal professionals to spend a greater proportion of their time actually doing law. We noted that one positive effect of Covid-19 is that it has accelerated the use of technology across the sector. There is evidence of law firms introducing or increasing their use of technology to interact with clients or help manage or process their work. There are also indications of increased use of digital comparison tools and reviews by consumers. However, the Legal Services Consumer Panel’s tracker survey shows that shopping around has not increased. The Board’s consultation on a draft statement of policy on empowering consumers is designed to stimulate faster and further progress on these issues.

Building on progress to increase our impact and build consumer trust

Following a wide-ranging exploration of the environment in which we are operating, we agreed that the nine challenges facing the sector outlined in the ten-year strategy remain the focus.

Of those challenges, perhaps the one that has generated the strongest consensus across all the partners we work with is the need to improve diversity and inclusion at all levels in the profession. We continue to see evidence of differential outcomes for legal professionals from different backgrounds – for example, exam pass rates, securing pupillages, disciplinary action, sanctions for sexual misconduct and counter-inclusive practices. We agreed that there is a need to consider equality, diversity and inclusion broadly and look beyond the protected characteristics to consider issues like education and geographical location.

Our discussion coalesced around the theme of trust and trustworthiness and the importance of increasing public confidence in the legal services profession. This includes in-house lawyers as well as lawyers and legal businesses serving consumers. Improving diversity in the profession will help to build trust. We must also increase public and professional trust in legal technology and increase public confidence in redress and regulation.

Working together to deliver ambitious plans

Turning to our business plan for 2022/23, the Board considered where the opportunities lay to strengthen progress in meeting the nine challenges.

Some ongoing projects from our current business plan include implementing the findings of the Competition and Markets Authority’s market study of legal services in 2016 and further review in 2020, and reviewing and revising our regulatory performance framework.

As part of our ongoing work on technology and innovation, we will also continue scoping the feasibility and policy options of a single digital register of authorised persons, in collaboration with the regulatory bodies.

During a discussion about some of the financial arrangements in place to protect consumers and legal services providers when mistakes are made, the Board noted that premiums had been sharply rising amid concern about the operation of the PII market. We also discussed the uncertain future of compensation schemes operated by smaller regulators.

These financial arrangements build public trust and confidence in legal services. We have already started to gather evidence to inform the scope of a future project on financial protection arrangements. We plan to engage broadly on this work, including with the Competition and Markets Authority and the Financial Conduct Authority.

Looking forward to next year, the Board explored ideas for a collaborative summit or conference that would bring together the many voices across the legal services sector with a role in reshaping legal services. We know the ambitions set out in the strategy cannot be achieved by the LSB alone. We plan to continue building momentum by inviting stakeholders to share their progress, discuss the challenges, and identify ways to make the most of opportunities.

Delivering value for money in the public interest

Another key focus of our day was to consider our budget for 2022/23. We are very conscious that our funding model – we are publicly funded, not from the taxpayer but from a levy on legal services regulators – makes it even more important that we deliver value for money, and we discussed the need to ensure every part of our activity is necessary and rigorously in the public interest.

We will consult on the draft business plan and proposed budget for 2022/23 in December 2021. We look forward to sharing it with you and working together to make a difference for people who need legal services.