Sole practitioners and regulation

I was interested in a piece in this week’s Law Society Gazette (see  The Sole Practitioners Group has warned that treating sole practitioner firms (SPFs) in the same way as other firms could lead to many of them no longer practising.

The SRA wants to simplify the regulatory framework, and therefore SPFs would have to appoint a compliance officer for legal practice (CoLP) and a compliance officer for finance and administration (CoFA) – in the same way that other firms and ABSs will be required to do.  The SRA recognises that the same person might be appointed to both roles (although the CoLP must be legally qualified).  But the SPG claims that individuals within SPFs would not have the time to perform both roles effectively.

Now, I have a good deal of sympathy for sole practitioners having to cope with an ever-increasing compliance burden.  It is much the same for many small businesses.  But I have to say that, if a sole practitioner wants the privilege of providing legal services protected by statute (the reserved activities), surely they can’t complain if they are required to be accountable to the regulator for those services through an individual who carries the responsibility?

It is undoubtedly relatively more burdensome for one individual in a sole practice or small firm to discharge compliance functions.  However, it seems to me that clients and the public have a legitimate expectation that those who are regulated will be properly supervised by the regulator.  If SPFs and other small firms cannot do this effectively (apparently on their own admission – or, at least, the SPG’s), this does rather support the argument that they are too small to be economically viable and present too great a risk to the public and the reputation of the profession.

Was that the conclusion the SPG intended us to draw?  Does the Law Society agree?  Does the SRA know?  Are the professional indemnity insurers watching?