1. The Legal Services Board – reforming legal regulation
Alex Roy, Head of Development and Research

2. The Legal Services Act 2007 and the LSB
What organisations did the Act create?
The Legal Services Board – LSB
The Legal Services Consumer Panel
The Office of Legal Complaints – The Legal Ombudsman
About the LSB
Nine board members
30 Staff
Annual expenditure of under £4.6million in 2011/12
Funded by a levy on the profession

3. The regulatory objectives
Protecting and promoting the public interest
Supporting the constitutional principle of the rule of law
Improving access to justice
Protecting and promoting the interests of consumers
Promoting competition in the provision of services
Encouraging an independent, strong, diverse and effective legal profession
Increasing public understanding of the citizen’s legal rights and duties
Promoting and maintaining adherence to the professional principles

4. Standards of regulation, education and training
Regulatory activities should be:
Transparent
Accountable
Proportionate
Consistent
Targeted only at cases in which action is needed
The board must assist in the maintenance and development of standards in relation to:
The regulation of lawyers by Approved Regulators
The education and training of Lawyers

5. Oversight regulation and our vision
Not watching and reacting but involvement and intervention
Leadership in new ideas and future directions
Vision for the market (the unofficial version)
Affordable legal services delivered at the right quality for consumers
Delivered by:
minimising the burden of regulation
reforming regulation so that it encourages innovation

6. Legal Services in England & Wales
The market
Legal Services in England & Wales
331k people employed in legal services in UK
Unreserved
Unknown number of persons offering unreserved services in E&W. In excess of 130,000 people
Legal practice
NFP
E.g CABs,
56 Law Centres
For Profit
E.g. –
1,823 members of the Society of Will Writers
In House
Reserved
147k persons authorised to offer reserved services
80% Legal Practice
persons authorised to offer reserved services
Solicitors
- 87,270
Barristers
- 11,706
Others -
9,672
20% In House
Solicitors – 23,311
Barristers - 3,040
Others – 1,557

7. Empowered consumers e.g. Large corporate
Regulation of legal services
Ministry of Justice
Office of Fair Trading
European law
Legal Services Board
Case law
Consumer Law
Master of the Faculties
Trading standards
CLSB
Consumer Bodies
Competition Law
Approved Regulators
CLC
IP RB
Empowered consumers e.g. Large corporate
Professional bodies/trade associations
ILEX PS
SRA
BSB
Custom & Practice
Media
Other regulators e.g. FSA, ACCA etc.

8. Number of authorised persons at 1 April 2012
Approved regulator
Regulatory body
Reserved activities
Number of authorised persons at 01 April 2012 and year on year change
Number of entities
The Law Society,
The Solicitors Regulation Authority (SRA)
Exercise of right of audience
Reserved instrument activities (Conveyancing)
The conduct of litigation
Administration of Oaths
Probate activities
120, %
10,202
The General Council of the Bar,
The Bar Standards Board (BSB)
15, %
N/a
Chartered Institute of Legal Executives (CILEX)
ILEX Professional Services (IPS)
+ 5.89%
7,907
The Council for Licensed Conveyancers (CLC),
7Reserved instrument activities (Conveyancing)
1, %
215
The Faculty Office
Notarial activities %
N/A
The Chartered Institute of Patent Attorneys (CIPA)
The Intellectual Property Regulation Board (IPReg),
Reserved instrument activities
1,745* 3.44%
170
The Institute of Trade Mark Attorneys
Reserved instrument activities Administration of Oaths
639* 3.06%
The Association of Cost Lawyers (formally ALCD
Cost lawyers Standards Board (CLSB), a %
Association of Chartered Certified Accountants(ACCA)
Institute of Chartered Accountants of Scotland (ICAS)
The Approved Regulators
Approved regulator
Regulatory body
Number of authorised persons at 1 April 2012
Number of entities
The Law Society,
The Solicitors Regulation Authority (SRA)
120,202
10,202
The General Council of the Bar,
The Bar Standards Board (BSB)
15,204
N/A
The Chartered Institute of Legal Executives (CILEX)
ILEX Professional Services (IPS)
7,907
The Chartered Institute of Patent Attorneys (CIPA)
The Intellectual Property Regulation Board (IPReg),
1,745*
170
The Institute of Trade Mark Attorneys (ITMA)
639*
The Council for Licensed Conveyancers (CLC),
1,071
215
The Faculty Office
858
The Association of Costs Lawyers (formally ALCD)
Costs lawyer Standards Board (CLSB)
565
* Joint registrants are shared between CIPA and ITMA

9. Our early priorities Independence of regulation
Redress for consumers when things go wrong
&
ABS liberalising the market to increase competition
Results
Second round of certifying governance standards against Internal Governance Rules
Solicitor and Conveyancer-led Alternative Business Structures opening for trading
Successful full year of operation for the Ombudsman, plus progress on first-tier complaint handling

10. Priorities for
The strategic priorities for the LSB for the coming three-year period:
Assuring and improving the performance of approved regulators
Helping consumers to choose and use legal services with confidence
Helping the changing legal sector to flourish by delivering appropriate regulation to address risks

11. Which means… 3 areas of work.
Looking at changes to regulators rules and authorisations
Working with regulators to improve their regulation
Outcomes
Risks
Entities
Improving the regulatory environment and encouraging innovation
Regulatory framework (reserved activities)
Workforce (education, diversity, quality)
Developing the evidence base and evaluating
Which means… 3 areas of work.

12. Focus on regulatory framework: The Reserved Activities
the exercise of rights of audience (i.e. appearing as an advocate before a court);
the conduct of litigation (i.e. issuing proceedings before a court and commencing, prosecuting or defending those proceedings);
reserved instrument activities (i.e. dealing with the transfer of land or property under specific legal provisions);
probate activities (i.e. handling probate matters for clients);
notarial activities (i.e. work governed by the Public Notaries Act 1801); and
the administration of oaths (i.e. taking oaths, swearing affidavits etc).

13. Focus on regulatory framework: Structure of regulation
Reserved Activity
Authorised Person
Approved Regulator
Regulation
Legal advice
Existing six reserved activities
New activities?
Individuals with protected titles
Entities
Other individuals

14. Focus on regulatory framework: Possible regulatory tools
When?
Prevention
Conduct
Remediation
e.g. Minimum service standards
e.g. Client money
e.g. Ombudsman Scheme
Services
Tools?
Market access and structure
Systems and processes
Pricing
Compensation
e.g. Training requirements
e.g. Maximum prices
Information
Behaviour
e.g. Code of ethics
e.g. Referral fee disclosure

15. Focus on regulatory framework: Changing the reserved activities
Extension of reserved legal activities (s24/ 6 LSA 2007)
• Lord Chancellor may extend (or reduce) list of reserved activities
• Only upon recommendation of LSB
Formal process set out in LSA 2007 Schedule 6
• LSB has powers to investigate whether to recommend list of reserved activities
• Consultation and advice are built into process

16. Call for evidence Surveys Shadow shopping
Focus on regulatory framework:
Looking at wills
Surveys
Shadow shopping
Call for evidence
97 interviews completed
Individual discussions
Business Interviews
Legal Services Consumer Panel
Joint LSB, Consumer Panel, OFT, SRA team
Call for evidence
Consumer survey
400 case studies and 20 policy submissions
500 consumers surveyed
101 wills assessed
All clients submitting wills interviewed
Testing will quality
Interviews with clients
Joint LSB, Consumer Panel, OFT, SRA team

17. Focus on regulatory framework: Shadow shopping results
Execution Pass
Quality Pass
Solicitor
All
98%
78%
Complex
95%
81%
Simple
100%
75%
Specialist will-writer
92%
79%
93%
73%
89%
Bank or affiliate group
90%
80%
Paper self-completion
63%
50%
Online self-completion
56%
86%
43%
91%
64%
Total
74%

18. Focus on regulatory framework: Shadow shopping reasons for failure
Inadequacy – where the content of the will does not account for an estate fully, fails to make adequate provision or neglects to take certain outcomes in to consideration. It also includes wills which are legally invalid.
Requirements – where the client’s requests have not been met (as specified in the testator questionnaire) through omission or conflicting specification.
Legality – where the actions specified in the will are potentially illegal;
Inconsistency – where the language, logic and/or content of the will is contradictory;
Detail – where items, people and requests are described in insufficient detail; and
Presentation – where the language and format of the document is lacking.

19. Focus on regulatory framework: Will-writing conclusions
Shadow shopping demonstrated that quality of wills inconsistent and harming many consumers
Case study evidence that arrangements for safe-keeping of wills by will-writing companies inadequate
Consumer survey reveals significant concerns over sales practices, particularly by will-writing companies
Compensation arrangements patchy and largely unenforceable outside of regulated firms
Need for reservation and appropriate regulation

20. Conclusions
LSB is a small, ambitious organisation with potentially a short lifespan
The Legal Services Act 2007 has led to a significant drive to reform the legal services market in England and Wales
Significant reforms have already been introduced – independent regulation and Alternative Business Structures
The next phase of work is challenging but could significantly improve the market for legal firms and consumers
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