We planned to assure the quality of legal services, the public interest and the reputation of the profession.
Key facts and figures
Assure projects 2021/22
Action | Outcome | Complete/Not complete |
---|---|---|
Deliver an alternative route to qualification We will expand the ways to become a solicitor by launching a work-based route to qualification. |
Initial work for this project was carried out in conjunction with a university partner that subsequently withdrew from the project. We undertook further work internally on developing a work-based route to qualification built upon existing work-based alternatives to the LLB and the Diploma. Some initial concerns about blending those elements were raised by the Admissions Sub-Committee and further detail has yet to be considered by that sub-committee. | Not complete |
Financial compliance and anti-money laundering We will continue to embed our proportionate and risk‐based approach to anti‐money laundering (AML) regulation and the financial inspection of law firms. |
We continued our development of a risk-based approach to inspection prioritisation to target areas of highest risk. The development of revised Accounts Rules was completed and will be implemented in January 2023. The revised rules have been modernised and simplified, while enabling further development of a risk-based approach through, for example, assessment of Cashroom Managers’ Accounts Rules knowledge. The Law Society’s AML team undertook a significant and unplanned exercise to assess members’ exposure to risk related to Russia and Belarus and report to HM Treasury/OPBAS. A planned thematic review focused on the AML policies, controls and procedures within the profession was also advanced in the year. It will be published in 2023. We continued to engage with government in relation to AML fining powers, which has since been reflected in the draft Economic Crime and Corporate Transparency Bill. We carried out a review to improve the Law Society’s ability to identify practice units at risk of financial failure and ensure regulatory resource can be allocated in accordance with the risk. A fully refreshed AML sectoral risk assessment was launched in March 2022. It provides an updated, much more detailed assessment of AML risks tailored to the circumstances, demographic and context of the Scottish profession. This is expected to be considered as part of firms’ own risk assessments and drive their AML policies, controls and procedures. Improvements to our risk-based approach to AML supervision saw additional dedicated AML resource; improvements to AML Sub-committee processes, procedures and decision-making criteria; AML team inspections processes and templates; lower-risk firm supervision; and availability of management information. | Complete |
Fit and proper solicitors We will ensure robust entry standards for the profession, by improving our policies and processes around the 'fit and proper' testing of solicitors. |
A revised draft of the fit and proper testing and guidelines has been developed. The proposals will be considered by the Admissions Sub-Committee in 2022/23. | Not complete |
Licensed Legal Services Providers We will work with the Scottish Government to commence the licensing of new legal service providers with alternative business structures. |
Significant progress was made on the policies, processes and systems that will allow the Law Society to license and regulate legal services providers (LPs), new types of businesses that are licensed to provide legal services to the public. They will differ from a traditional legal practice, which can only be owned by solicitors, whereas LPs can be owned by other regulated professionals who are not lawyers. This work will be continued and completed in 2022/23 to allow applications to become a licensed legal services provider. | Not complete |
Reform legal services regulation We will engage in the Scottish Government's consultation on legal services regulation and work to ensure reform is considered a priority within the Scottish Parliament. |
We submitted a detailed and comprehensive response to the Scottish Government’s consultation on reforming legal services regulation in December 2021 to improve consumer protection and allow the Scottish legal services market to thrive. Since then, we continued to engage with the Scottish Government and were pleased to see plans for a new Bill to be included in the Programme for Government for 2023. | Complete |
Develop a regulatory impact assessment We will develop and implement a new, robust method of assessing the regulatory impact of our solicitor practice rules. |
Principles in relation to a new regulatory impact assessment methodology were agreed by the Law Society of Scotland Regulatory Committee. The committee agreed that the executive should prioritise other work over the year and this objective will be completed in 2022/23. | Not complete |
Improve consumer liaison We will engage with the new Consumer Scotland body and form our own independent representative consumer reference panel for consultation on key regulatory matters. |
Consumer Scotland was launched in the summer of 2022, subsequently resourcing and developing the organisation and creating work plans. It was therefore premature to engage Consumer Scotland in relation to our regulation. The work to set up our own consumer reference panel was nearly completed during the year as we awaited confirmation of representation on our consumer panel from other consumer bodies. The Society's new consumer panel is due to meet in January 2023. | Not complete |
Regulatory Committee annual report 2021/22
The Regulatory Committee has had another busy year executing the Law Society’s regulatory function and contributing to regulatory strategy and policy.
As we emerge from the Covid pandemic, the committee has been keen to welcome back face to face meetings where possible, finding direct discussions to be more conducive to collaborative committee work focused on delivering its regulatory objectives and contributing to regulatory policy at the highest level.
Committee changes
Following a short period as interim convener, after the departure of Craig Cathcart in December 2021, the committee was pleased to appoint David Gordon as its convener in April 2022. Under legislation, the convener is chosen by the committee from among its lay membership.
We welcomed three new members to the committee during the year. Jacqui Low and William Braes joined in the first half of the year as lay members, with Laura Connor joining later in the year as a solicitor member. The new members bring a wealth of knowledge and experience which will further enhance the committee's expertise and awareness of regulatory matters. Together, the committee brings a wide range of experience to serve the public interest from inside and beyond the legal profession including: litigation, in-house, academia, non-executive directorship, privacy and professional regulation.
In August Esther Duncan, solicitor member, stepped down from the committee to focus on other professional commitments.
October saw the sad passing of David Mair. David joined the committee in January 2018 as a solicitor member, and his significant contributions to the committee’s work will be greatly missed.
Linsay Leslie stepped down as a lay member of the committee in October, having been on a leave of absence since May. Between May and December, Lindsay’s position was filled by Janet Moss as a co-opted lay member.
As we approached the end of 2022, the committee appointed William Braes as its lay vice-convener, supporting the role and responsibilities of the convener.
At the end of 2022, the committee had eight members (four solicitor and four lay members) with two vacancies. It is anticipated that these vacancies will be filled in early 2023.
Standing orders of the Law Society of Scotland
In August the committee brought forward changes, which were subsequently approved by the Council, to the standing orders to increase the number of terms a member of the committee may serve, increasing from two terms to three.
The reasons were to provide consistency with the maximum number of terms members of its sub-committees may serve and also, more importantly, to retain the extensive and valuable knowledge and experience within the committee for a longer period.
Regulatory Committee remit
The committee was in collaborative and productive discussions with the Society’s Council about reviewing its remit for the first time since it was agreed in 2015. The purpose of the review was to develop a remit more reflective of the committee’s statutory responsibilities in delivering its independent regulatory function and the Society’s constitution.
It is intended that the committee’s new remit will provide greater clarity and certainty and will allow the committee to move forward with overseeing the Society’s regulatory regime in a way that is proactive and proportionate and ensuring that the interests of consumers of legal services are and remain at the forefront of the committee’s work.
Rule amendments
The committee agreed two Practice and Account Rule amendments during the year:
- Accounts Rule B6 – several amendments were made, intended to provide improvement to definitions which have previously caused some issues for financial inspections.
- Conduct Rule B17 - Duty to Co-corporate with the Commission, which seeks to remind members of their obligation to engage and provide the Scottish Legal Complaints Commission (SLCC) with requested information in a timely manner.
Legal services review
In November 2022, the committee appointed three members (the convener, one lay member and one solicitor member) as the committee’s representatives on the Society’s dedicated Legal Services Review Working Group. The working group membership is shared equally between the committee and the Council.
In December, the Scottish Government published its response and proposals for regulatory reform, following its consultation exercise in 2021. The committee welcomes many of the proposals which reflect the government’s recognition and confidence in the Society and in the committee’s track record in maintaining professional standards and protecting the public.
The committee is looking forward to engaging with the Scottish Government and other stakeholders as work progresses towards the introduction of a Bill to reform the regulation and delivery of legal services in Scotland.
Regulatory consultations
With the assistance of its sub-committees and colleagues within the executive, the committee reviewed and approved three regulatory consultation responses, each relating to SLCC rule changes and its oversight powers.
Success Fee Guidance
In the early part of 2022, the committee concluded and approved the Success Fee Guidance. This was a significant piece of work, that had taken almost 18 months of careful drafting and consideration, the focus of which was to produce guidance to accompany the Society’s Style Success Fee Agreement (SSFA).
This guidance was produced to promote and encourage Scottish solicitors to use the Society’s SSFA and to highlight the solicitor’s responsibilities when doing so. The guidance highlights factors the solicitor must consider when advising the client, and those that must be drawn to the client’s attention to ensure that the client is fully informed and understands the nature of the agreement which they are entering.
Licensed legal services providers
As the Society moved forward to open its doors to applications from businesses seeking to be a licensed legal services provider in Scotland, under the Legal Services (Scotland) Act 2010, work picked up for the committee and its sub-committees to ensure that a robust regulatory regime is firmly in place.
The committee has delegated, where it is appropriate to do so, its decision making powers to its specialist sub-committees, while retaining overall oversight. In November the committee approved the complaints processes and procedures applicable to licensed legal services providers.
In 2023, and as work progresses at a swift pace, the committee anticipates a significant increase in matters that will need consideration and decisions before the Society can accept initial applications.
Regulatory decisions
Throughout the year the committee considered and made decisions in many regulatory matters, in addition to those mentioned elsewhere in this report. These included:
- Agreeing to establish its Consumer Reference Panel and the panel’s terms of reference. Work has progressed on this and the panel was scheduled to meet for the first time in January 2023.
- The committee agreed to establish a working group to consider if there are any regulatory gaps within its current regulatory powers that may be detrimental to consumer interests. The group is expected to report in early 2023.
- Agreeing several proposals to improve the complaints process to enhance and better manage the experience of complainers.
The committee is lucky to have the benefit of more than 100 volunteers across its many sub-committees, who all provide their time, experience and knowledge without financial reward and for the benefit of the profession and public. They all contribute significantly to the committee’s regulatory work. The committee would like to take this opportunity to convey its thanks to all those volunteer members.
During the year the committee approved the appointment and reappointment of 19 sub-committee members. Notwithstanding the significant number of appointments, the committee is aware of the challenges faced by the sub-committees in maintaining their membership at quorate levels.
Scottish Solicitors’ Guarantee Fund annual report 2020/21
The Scottish Solicitors' Guarantee Fund exists to protect clients who have lost money because of the dishonesty of a solicitor or a member of their staff. The fund is paid for entirely by solicitor firms without the use of taxpayer money from government.
The fund was created by statute under S.43 of the Solicitors (Scotland) Act 1980. The Scottish Solicitors’ Guarantee Fund trades as the Client Protection Fund.
The Law Society of Scotland's Client Protection Sub-committee has delegated authority for all claims and investment decisions. It further delegates minor claims to the Director of Financial Compliance, with these decisions being sample checked by the sub-committee regularly.
Download the full annual Guarantee Fund report and financial statements
Professional Conduct Complaints 2021/22
The Law Society investigates conduct complaints made against Scottish solicitors. The Society has the power to makes findings of unsatisfactory conduct. In more serious cases it can prosecute a solicitor for professional misconduct before the independent Scottish Solicitors' Discipline Tribunal.
You can read more about our conduct complaint processes on our website.
Gender pay gap report 2021/22
We have published our gender pay gap figures since 2018 in accordance with the statutory reporting regulations. The UK Government requires businesses and organisations with 250 staff or more to report their gender pay figures annually. With around 140 employees, we report voluntarily as part of our commitment to equality and inclusion.
You can read our most recent report for 2022 here and more on our EDI work in the Equality and Diversity section of our website.
Annual report 2022
Our annual report and financial statements for 2021/22.