June Council Meeting by Linda Lee
COUNCIL MEMBERS REPORT
JUNE 2007
LINDA LEE
SUMMARY
The meeting on the
This work will be finalised at the July meeting and appropriate changes made at the July AGM.
A full report on the new Boards and their remits will therefore be offered in the July report. The key decisions made at this meeting are listed below. The title of Treasurer will be reinstated and retained although it will describe the conflated role of the Treasurer and the Chair of the yet to be named Management Board. [At a subsequent meeting of the Corporate Governance Board it was decided that the name ‘Management Board’ would be used unless the new Board itself determined a new name.]
The Council also decided in very broad terms its annual work plan for 2007/8 which allow for increased consultation with the profession.
AMENDMENT TO THE SOLICITORS FINANCIAL SERVICES (SCOPE) RULES 2001 & THE SOLICITORS’ FINANCIAL SERVICES (CONDUCT OF BUSINESS) RULES 2001 – CHANGES TO TAKE EFFECT ON
The paper was presented by Antony Townsend, Chief Executive of the SRA. The changes to the rules are a tidying up exercise consequent on the new code of conduct and the establishment of the new regulatory boards. The Rules only apply to solicitors and firms providing financial services and the SRA will commence a publicity campaign to inform such solicitors of the changes.
Since
However, Part XX of the Act makes special provision for professional firms which do not carry on main stream investment business but may carry on regulated activities in the course of the professional services provided to their client. This section enables firms of solicitors which meets certain conditions to be treated as exempt professional firms and to carry on activities known as exempt regulated activities. These firms do not need to be regulated by the FSA but are able to carry on exempt regulated activities under the supervision of and regulation by the Law Society which is a designated professional body for this purpose. This regulation and supervision is now undertaken by the SRA.
The amendments requested were approved by Council.
It should be noted that the substance of the Rule has not changed simply the nomenclature.
A full copy of this paper is available on request.
Overpayments to the compensation fund
In July 2006 Council reduced some payments by certain groups however due to an administrative error this was not picked up. The SRA reported the error promptly as soon as the error had been picked up. Since then the SRA had been working to arrange repayments to those affected. Antony Townsend of the SRA said he was less worried that the initial error had been made by SRA staff but it was more worrying that it had not been picked up. He felt there may be criticisms of the SRA and the Law Society more generally. He reported that letters would be issued to those who had been overpaid and a notice published to those who did not receive such a letter to make representations if they felt they had overpaid.
Mr Townsend was asked if he could reassure Council that the profession as a whole would not suffer as a result of this error. Mr Townsend reported that he could not offer such reassurance as the SRAs only income was from the profession. However the SRA have adopted the cheapest method possible and although he stressed this was very much of an estimate, he felt the total cost of repaying the overpayment was in the region of £6,000-£7,000.
SRA consultations
Mr Townsend was asked about the number of consultations that had been issued by the SRA. He reported that the rate of issuing consultations would slow down as there was now quite a lot of work to be done on the consultations already put out. Consultations were very cheap but he did not have costings. He reported that he had been very pleased by the way in which the Law Society had responded to consultations and the SRA will publish a summary in response to consultations.
The Presidential Plan
Mr Holroyd published his president plan for 2007. The primary purpose of the president’s office is as follow:-
- Represent the Law Society to the profession and stakeholders
- Represent the profession to stakeholders and the public
- Oversee the effective governance of the society
In future the presidential plan will be integrated into the business plan.
A full copy of the paper is available on request.
It amplifies how Mr Holroyd intends to fulfil those purposes and seek to achieve the objectives sent out in the presidential office section of the business plan. In his paper Mr Holroyd comments that the president needs to be perceived by the profession as its leader and so the overarching aim for the president’s office work is a demonstration of leadership in both political and practical terms. This can be described as professional leadership. It means listening to the profession and responding but also spotting new issues and trends – horizon scanning – and ensuring that this informed the Society’s work in support of solicitors.
The additional Themes for 2007-2008 will be
· Promoting and celebrating excellence in practice
· Engaging with small and medium sized practices and promoting packages of support developed by the Society
· Engaging the profession more effectively
· Working with the Council to achieve effective governance changes; and
· Promoting a sense of common purpose in the delivery of the Society’s objectives
Mr Holroyd will also devote himself to continuing current activities established in Ms Woolf’s year. Mr Holroyd also intends to influence the planning and design of the implementation of the Legal Services Bill and its new regulatory regime and prepare for the introduction of alternative business structures and working with the profession to grasp opportunities and manage the threats.
Mr Holroyd intends to continue to attempt to secure a sustainable future for Legal Aid by continuing to lead the Society’s campaigning work in association with the new Legal Affairs and Policy board and to work with practitioner associations and the LSC to design a truly sustainable future for Legal Aid.
He will also work to support the new Membership Services Board as they develop new networking and communication tools to maximise engagement with as wider cross section of the profession as possible by
· reaching out to the network of mid-tier firms in the regions and
· developing a programme of regional engagement with small firms
· promoting packages of support for small and medium firms who need to change and adapt to changing market conditions
· sustaining the degree of engagement with large firms
· working in partnership with Law Society Sections and recognised groups as well as local law societies and other interest groups within the profession
Mr Holroyd also reports that we will continue the professional newsletter and president’s blog as part of the communications plan. He also intends to work with the Junior Lawyers Division of the Law Society and others to plan a programme of engagement with non-owner solicitors in the first stage of their professional careers as well as visiting firms and meeting managing partners to engage with “future movers and shakers” as well as in house and government lawyers.
Audit Committee Annual Report for the year 2006
A full copy of this paper is available on request.
The committee in respect of those systems of a internal control which is just considered, found no major items on which to report apart from: _
1. The collection of compensation fund contributions which led to £3.5 million being over collected and which will be refunded to members by the Solicitors Regulation Authority as reported earlier in this report.
2. Risk management
The audit committee still feels there is a need to re-establish risk management in 2007 through all the businesses in the society but it is most concerned that the process should be fully integrated and include the bottom up aspect as recommended to Council last year but not actioned;
3 Governance
The audit committee was pleased to note the progress in relation to reforming Council and its sub-structures and is most concerned that the Council should carefully consider the status of the new management board.
4 Purchase Ordering
The audit committee has commented before on purchasing ordering which is operated through an extensive system of delegated financial authority in every business unit. The committee again draws to attention to the fact that a current audit indicates that it is still not functioning as well as it should and needs improving in 2007. The committee recommends that the Council take action to ensure better compliance with the purchase ordering system.
5. Compliance with the combined code
The committee has highlighted areas of non-compliance for example at the AGM the chairs of audit and re-numeration are unable to attend and speak as of right at the AGM because as lay chairs they are not solicitors.
The committee believes that the highest possible degree of compliance with the combined code is essential to protect the reputation of the society and its officers not withstanding that such compliance is not obligatory and believes that non-compliance with the code should only be accepted when the fact that the society is not a listed company makes it impossible to apply a particular requirement or devise an appropriate equivalent.
Governance Review
A great deal of time is spent considering the new boards and the ways in which they will operate. However, as these matters will not be finalised until the July meeting, it is intended that a full report would be made available in the July report. It should be noted that by the time of the July meeting, the chairs and new board will already have been appointed and will meet following the next Council meeting. The decision as to whether the relationship with the local law societies will be the prime responsibility of the membership services Board or the Legal Affairs and Policy Board will be taken in July. The role of the Treasurer and the Chair of the Management Board (the name of this Board is yet to be finalised) will be conflated into one role to be known as the ‘Treasurer’
The key decisions taken were as follows (full papers can be supplied on request)
The office holders’ role will be enlarged so that they will be ex officio members of all Boards. However Council expressly rejected the idea that the office holders would extend their roles further by chairing the new Boards.
Job descriptions for the office holders and Chairs were agreed although the job description for Council Members was deferred until July.
However the list of key skills and abilities in the Council Member’s job description will be removed.
Council Annual Work Plan
Council intends to set its own agenda and agreed an indicative list for 2007/8 as follows:-
Member Services Board
1.
(a) Policy for member services (strategy, planning and pricing principles)
(b) Services for legal aid practitioners
(c) Communications strategy (across all boards)
(d) New ways of supporting Council Members in engaging with the profession
(e) New ways of working with local law societies, Groups, and practitioner associations
(f) Strategy on international services for members
Legal Affairs and Policy Board
2.
(a) Legal aid strategy
(b) Strategy on e-law and e-conveyancing
(c) Future of civil litigation
(d) Priorities for the Ministry of Justice
(e) Money laundering – implementation of Third Directive
(f) Pro bono strategy
(g) Small claims – development of Fast and Fair
(h) HIPs – monitoring developments
Regulatory Affairs Board
3.
(a) Preparing for the advent of Legal Services Board and implementation of the Legal Services Bill
(b) Training framework strategy
(c) The move to proportionate, targeted, risk-based regulation (a strategy for rules and ethics)
(d) A strategy for regulating ABSs
(e) Priorities for pressing for changes to the new Rule Book (and guidance)
Management Board
4.
(a) Budget, business planning and group budgetary control
(b) A strategy for efficiency and value for money across all Boards (including the Regulatory Boards)
(c) Turnbull risk analysis
(d) Monitoring of the working of the separation of the regulatory functions
(e) Corporate planning and monitoring
(f) Scrutiny role in relation to SRA and LCS
(g) Equality and diversity (across the Group)
Council also agreed to consult the profession using but not limited to the following methods:-
Council Member newsletters;
A special letter generated by the Society for Council Members to send to local law societies, Groups, Sections and practitioner associations with which they are associated;
A link in Professional Update to a survey on a list settled by Council;
A link on the website to the survey;
A link in the President’s newsletter to a survey;
An email from the President to managing partners and General Counsel/Heads of Legal Departments with a link to the survey.
