Regulation matters
The Law Society’s Regulation of Practice Committee has a crucial role in maintaining professional standards, and an even more important one in supporting solicitors, committee chair Garry Clarke tells the Gazette
Promoting effective regulation is a strategic priority for the Law Society, set out in the Law Society Statement of Strategy 2024-2028.
Through ensuring effective regulation, the Law Society protects and supports both the public interest and the solicitors’ profession.
Its role as a regulator is central to sustaining trust in the solicitors’ profession and contributes significantly to the Irish legal system, economy, and society.
In this context, the Regulation of Practice Committee has a crucial role in maintaining professional standards and an even more important one in supporting solicitors as they juggle the many demands of legal practice.
It is the largest of the Law Society’s committees, with 32 members sitting an average of 50 meetings per year across four general divisions: a claims division, audit subcommittee, investments subcommittee, and a full committee plenary.
The committee has two primary functions: to administer the Law Society’s Compensation Fund and to oversee the profession’s compliance with regulations regarding accounts, anti-money-laundering, and other regulatory requirements under the Solicitors Acts not assigned to other regulatory committees.
While Garry acknowledges the strict regulation in place to protect clients, he also believes that the profession, overall, is highly compliant.
Of the approximately 12,000 practising solicitors in Ireland, only 68 complaints were upheld against solicitors by the LSRA in their last report, with a small number of practitioners being the subject of multiple complaints.
Instances of dishonesty or mismanagement are rare, with most complaints stemming from human error rather than intentional misconduct, he says.
The committee’s aim, while acting within the committee’s powers under the Solicitors Acts, Solicitors Accounts Regulations, and Solicitors (Money Laundering and Terrorist Financing) Regulations, is to offer a supportive, de-escalating approach to help practitioners get back on track when issues arise – focusing on solutions rather than punishment.
Support
In terms of regulatory procedures, the Law Society conducts 350 investigations each year into solicitors’ practices. These investigations are preceded by advance notice, allowing firms to prepare.
However, the challenge for many small practices lies in balancing the demands of legal work with business management – a skill many solicitors are not trained in, Garry points out.
Many firms face difficulties when the pressures of running a business, alongside the complexities of legal work, become overwhelming.
Issues such as bookkeeping errors, missed deadlines, or staff turnover can lead to problems, which are often exacerbated by mental-health challenges.
Solicitors, particularly sole practitioners, often experience significant isolation and work-related stress.
As the legal landscape becomes more complex, practitioners may need to specialise rather than spread themselves thinly across various areas of law.
Solicitors, especially those in rural areas or smaller towns, are finding it increasingly difficult to manage the demands of general practice, as areas such as conveyancing, probate, and contentious legal matters grow more intricate.
For this reason, the committee welcomes an increasing focus on the wellbeing of solicitors, since maintaining psychological health is crucial for sustaining a successful legal practice.
The committee’s approach involves helping practitioners in difficulty to identify and address personal and professional challenges, offering peer support through a personal, non-bureaucratic process.
Succession
Succession planning is another thorny issue. Garry believes that there should be a full ten-year run-in to any retirement schedule.
While it’s important to plan for an exit, many don’t think about it early enough. Career paths tend to evolve in unexpected ways, and it’s important to be prepared to make decisions when the time comes.
As many older practitioners struggle to retire and pass on their practices, the committee has introduced initiatives such as the Practice Advisory Service, provided by Outsource.
These reviews, subsidised by the Law Society, cost €150 for new practices and €250 for existing firms, and offer vital advice to lawyers in firms at various stages of their life-cycle – whether just starting out, in midcareer, or those contemplating retirement.
Where no clear successor emerges to take over a practice, Garry advocates that solicitors consider merging with others to ensure both financial sustainability and better mental wellbeing.
Consolidation of practices may both reduce overheads and increase business efficiency, and Garry observes an increasing trend of mergers to take advantage of economies of scale at all levels in the profession.
With increasing numbers of younger solicitors opting for larger firms in cities, rural practices are facing a significant challenge in finding new talent to take over long-established client bases.
In some cases, practices may no longer hold financial value due to the complexity of the work involved and the lack of premium placed on existing client files.
The concept of dividing fees on a file-by-file basis when transitioning a practice is a practical way to manage the division of work and finances during the transition, Garry points out.
“It’s almost down to a file-by-file transfer exercise, which works quite well for many retiring practices.”
The issue of handling staff redundancies and ensuring continuity for long-standing clients is a significant concern for retiring practitioners, especially when their clients are the second or third-generation of their original clients.
“When you start off a new practice, you think your career path is linear, but things will always change. And, in all of our careers, we rarely end up where we thought we were going to end up,” he says.
“What you want to do is give yourself the business intelligence to be able to make the right decisions when you’re faced with those decisions.”
Evolution
The relationship between practising solicitors and their regulatory bodies is evolving, Garry points out.
Historically, many solicitors have viewed the regulatory bodies as overbearing and somewhat disconnected from the realities of running a practice.
“In the past, those who were practising regarded the Law Society as people who came down and found faults and made things difficult,” he says.
However, there has been a significant shift in how the Law Society approaches regulation, especially in the context of anti-money-laundering (AML) compliance.
There has been a real effort to move away from the ‘us v them’ mentality, and to promote effective regulation by the Law Society by engaging in closer discourse with practitioners.
This approach can only help solicitors and firms in the long run and ensure that, through the work of the committee, the Law Society’s statutory obligations under the Solicitors Acts and its mandate as the competent authority for solicitors under AML legislation is fully met.
Culture shift
Garry became committee chair around the same time as the appointment of Dr Niall Connors as the Registrar of Solicitors and the Law Society’s Director of Regulation.
Niall commenced a review, led by Dr Shane McCarthy, into the whole scope of regulation of practice. This led to a cultural shift from what may have been perceived as a hostile approach and language, Garry says.
“Niall, as the new director, has come in with a whole different palette from his experience, introducing new concepts and new thinking – including considering regulation as a service to the profession,” he says.
“The whole point is that it’s not just one-way traffic. It’s ‘how can we help you stay on track?’”
There has been an active canvas of the opinions of local bar associations on what their members’ difficulties and sticking points are.
This proactive approach to regulation, including new projects such as the introduction of the Regulation Answers helpline, provides solicitors with a resource where they can ask questions and get immediate help with regulatory concerns.
And a renewed focus on education – whether through workshops, practical case studies, or videos for non-solicitor staff – also makes the regulatory process more accessible and less daunting.
Garry points to the rollout of Law Society accounting training for legal support staff, allowing them to integrate existing skills with the nuts and bolts of smoothly running a practice.
AML is a huge issue, especially when solicitors are dealing with clients they have known for years, he says: “There’s a statutory requirement for more documentation and a better understanding of the source of funds, even if the solicitor knows the client personally.
“The reality is that solicitors are struggling to come to terms with their obligations under AML legislation. That is why Tina Beattie, who has a background in regulation and education, has been appointed as head of AML, to address this challenge.
“AML compliance is really serious. If you don’t do it properly, it’s a criminal offence, and you could also unwittingly allow illicit funds wash through your client account. All the staff in your office, including your support staff, need to know about it, be engaged with it, and take responsibility for compliance.”
Education, AML toolkits, and wider stakeholder engagement are key elements of the Law Society’s AML strategy to meet its regulatory responsibilities, and many of these improvements are a direct result of member feedback that the Law Society has received.
Practical scenario workshops on AML have proved very popular with members and are a regular agenda item for Law Society cluster events, at which Garry frequently speaks.
Meeting of minds
A considerable amount of work goes into Regulation of Practice Committee meetings. These are held every six to eight weeks and take the best part of a day.
Preparation for the meetings – which involves reviewing the material and accountants’ reports – can take another day.
Of the committee’s 32 members, 28 are solicitors, with a further four being lay members.
“It’s particularly valuable that colleagues are involved in this committee and get to share their expertise and perspectives, especially when the goal is to help others improve, not just punish them for mistakes,” Garry says.
Committee members want to genuinely support and guide firms through their struggles, rather than just focusing on enforcement, he says.
Current issues that appear in many accounting reports relate to letters of engagement, historical balances, and poor bookkeeping.
“In all the regulated professions, the amount of regulation is growing. We’re subject to more oversight, rather than less, and that's whether we like it or not. The issue for the Law Society and for the Regulation Department is how we bring the profession to a point where practitioners can cope with their obligations into the future,” Garry concludes.
Mary Hallissey is a journalist with the Law Society Gazette.
More information about the Regulation of Practice Committee is available on the Law Society website.