The Gazette 1994

GAZETTE

APRIL 1994

V I E W P O I N T

L a w S o c i e t y E x p e n d i t u r e: G e t t i n g V a l u e f o r M o n e y ?

There is increasing emphasis nowadays in virtually every walk of life on openness and accountability and, in relation to professional organisations that are spending their members' money, questions inevitably arise about whether those who are footing the bill are getting value for money. The Law Society, as a representative organisation financed through the subscriptions of its members, is no exception. It too is called upon, from time to time, to render an account of its stewardship. The Society is required under its bye- laws to publish audited accounts to its members each year and the members are entitled, at a general meeting, to discuss the accounts and ask questions. Recently, as a result of the initiative of a particular group of members, an item of special business on the finances of the Society was requisitioned for the half-yearly meeting of the Society held in Connemara. As those members of the Society who were present will recall, the ensuing debate at the meeting was lively and informative. In the last ten years, the cost of a member's registration fee (practising certificate and member's subscription) has increased by over 97% (from £274 in 1984/85 to £541 (excluding group life assurance scheme) in 1994/95). In the corresponding period, the Consumer Price Index increased by only 39%. It is clear, therefore, that Law Society expenditure has been outstripping inflation. Members are no doubt interested in why this is so and, at the meeting in Connemara, some members sought explanations for the current comparatively high levels of expenditure. The audited accounts for the year ended 31 December, 1993, show that income from registration fees amounted to about £1.7m while expenditure on running the Society (excluding the Law School and the

Compensation Fund) came to £2m. The balance was made up from income derived from other sources - principally the commercial activities engaged in by the Society - so that, overall, there was a small surplus. However, expenditure over the years (including capital expenditure) has been exceeding income and accumulated debt as at the end of 1993 was almost £800,000. In his letter to the profession in January, the President of the Society outlined the steps that were taken to deal with this. Capital expenditure would in future be financed in the main by means of fixed term borrowing and total Society indebtedness would be gradually reduced. The President also spoke about the need to improve facilities at Blackhall Place and also to improve services for members. These desirable objectives necessitated a further increase of £75 in the registration fee for 1994 - an increase of 15%. Not unexpectedly, this increase precipitated discussion at the half-yearly meeting and the meeting passed a resolution calling on the Society to continue to pursue vigorously policies that would bring about an overall reduction in cost to members. Running a statutory regulatory body, that also has a representative role, for a growing profession of 5,000 solicitors is an expensive business and, in our view, when regard is had unreasonable. The Society is obliged under statute to discharge its function of registering and licensing solicitors to practice. It must also carry out a disciplinary role, upholding the high ethical and behavioural standards that the members rightly set for themselves. At a time of increasing difficulty and default in the profession, this regulatory role is demanding ever-increasing resources. The evidence suggests that complaints against solicitors are growing and the to all relevant considerations, a registration fee of £575 is not

Solicitors Bill will add further to the volume when the new jurisdiction relating to shoddy work and overcharging is fully operational. The appointment of a legal ombudsman - also a feature of the Solicitors Bill - will also undoubtedly impact further on the administrative costs of the Society, quite apart from the fact that the Society itself will have to fund the office. The Society, of course, also provides services to members and represents the interests of members in relation to all matters affecting the profession. In recent times, the Society has been taking steps to improve the quality of legal practice in this country. A Practice Management Committee has been established and that Committee is developing practice management 'standards' and intends to promote these throughout the profession. A series of seminars will be held throughout the country. The recently launched Solicitor Link service also aims to assist practitioners who are seeking to amalgamate or otherwise reshape their practices. Members will also have observed a much-expanded Continuing Legal Education programme which, to date, has been highly successful. These are just a few of the more recently developed services that have been added to the traditional range of services on professional practice matters including, of course, the excellent library services. In its representational role we believe that the Society has acquitted itself well in recent times, particularly in its negotiations with the Government on the Solicitors (Amendment) Bill. The Government's decision to remove from the Bill provisions that would have allowed banks and other financial institutions to do probate and conveyancing has been greatly welcomed in the profession. It is clear also that the Society has been working (Continued overleaf) 169