We've just received a press notice about the Solicitors Regulation Authority’s announcement that law firms holding client funds will no longer have to submit an annual accountant’s report.
Under the new regime a firm’s compliance officer will have to sign a declaration stating they are satisfied that client accounts are being managed according to SRA regulations.
There have been some previous conversations about the specialist reports required by the SRA, which lawyers view as a burden on smaller firms. According to Peter Noyce, head of professional services at Menzies LLP, around 9,000 law firms hold client funds, so the SRA’s move could save the legal profession £30m a year.
The SRA reportedly expects to save £200,000 a year through reduced processing of accountant’s reports. But Noyce admitted that the regulator may incur extra costs if it has to resolve a greater number of client account problems.
Noyce sees ”the removal of this compliance burden as an opportunity to invest in better practice management advice", something the profession clearly needs. But what will that mean for accountants? Is it yet another case of accountants being scapegoated as a profession bound up in red tape that poses a burden to poor, struggling businesses such as law firms?
I'd be curious how many AccountingWEB member firms might be affected, and whether this would be a significant loss of business. Or are there opportunities here to advise law firms on practice management and growth to equip them for self-regulation?