The Legal Services Board (LSB) has laid out a clear timeline for the Solicitors Regulation Authority (SRA) to implement major reforms in the aftermath of the Axiom Ince controversy.

The oversight body had previously confirmed that the SRA must introduce changes within a year, following a critical report into the regulator’s handling of the now-closed law firm.

The proposed reforms include enhanced scrutiny of mergers and acquisitions, deeper financial assessments of firms, and improved intelligence sharing aimed at identifying early risk indicators. A central directive from the LSB is for the SRA to "embed new governance structures with greater oversight from its board and regular reporting to its audit and risk committee." Most of these structural changes are required by the end of December, though the SRA has until the end of April to improve staff training based on the lessons learned. Throughout the first half of next year, the SRA is expected to roll out systems to "proactively collect and analyse market intelligence," including the ability to identify risks stemming from law firm sales.

The LSB also expects the SRA to introduce a new framework for assessing potential consumer or market harm due to a firm's financial condition. This involves obtaining and reviewing financial and accounting data from law firms. This initiative is targeted for completion by the end of July next year, although there is flexibility to extend this deadline if needed. In May, the LSB noted that the SRA "has already developed a robust plan in response to the issues identified in the independent Axiom Ince report and has taken steps to begin addressing the issues identified." Delivering these reforms will be a significant responsibility for Sarah Rapson, the incoming SRA chief executive, who is set to join the organisation later this year. Uncertainty remains about whether the timeline will be influenced by the LSB’s ongoing investigation into the SRA’s handling of the closure of the Sheffield-based firm SSB Law. 

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Source: John Hyde, The Law Gazette