SPECIAL FEATURE: How do you know which regulator is best for your conveyancing firm? – Access Legal

SPECIAL FEATURE: Access Legal have written an article asking how you know which regulator is best for your conveyancing firm.

Working with so many law firms, I’m often asked which regulator is better for conveyancers – the CLC (Council for Licensed Conveyancers) or SRA (Solicitors Regulation Authority). It’s an age-old question that often depends on the firm’s size, their requirements and their clients.

The simple answer is that one does not outperform the other and essentially they both play very similar roles in regulating those who help clients who are buying and selling a home.

Both regulators have similar expectations in relation to client care requirements but there are some small differences between them and it’s important to know what these are in order to help you decide which is the best fit.

The CLC Handbook includes much of what is covered by the SRA’s Standards and Regulations to maintain compliance and ensure clients receive the same high-standard of service whichever legal entity they choose.

Acting for both parties

One reason why conveyancers might choose the CLC over the SRA is that it allows them to act for both sides in a property transaction relatively easily. The main stipulation from the CLC, as detailed in the Conflict of Interest Code, is that there’s informed and written consent, and that individuals are represented by different authorised persons and parties at the firm.

The SRA Codes of Conduct, however, state that it’s not acceptable for the firm to act for both clients in the same transaction, except in a small number of exceptional cases due to the risk of a conflict of interests. Although, the Law Society recognises that while both sides have a common interest in completing the sale, their interests differ because one is buying and the other is selling, so it’s unlikely to be a problem in a property purchase.

It’s often standard practice for CLC-regulated firms to handle both sides of a transaction because it helps speed up communication and the completion, and you will find that the department is set up in a way which allows for this to be a regular occurrence or standard practice.

But firms should be aware of risks too – including the loss of revenue and clients that can happen due to ‘inequality of influence or disproportionate bargaining power’. For the more cautious firms, the SRA’s approach of only being able to act for one party might therefore be more preferable.

So which regulator is best?

Both regulators are very clear on their expectations of law firms and conduct regular reviews to ensure they are complying with the regulatory obligations.

So when it comes to choosing between the two there are three further factors for firms to consider:

1. The proportion of your work that comes from conveyancing and related services like wills and probate.

Exactly as their name suggests, the CLC specifically regulates this area of law, so you’ll receive resources, training and updates relating to it. Potential clients may look to see whether a conveyancer is specifically licensed by the CLC when completing a property transaction, so it could make better business sense for you to choose it. That said, the SRA is well-known and might just as easily be the first port-of-call for members of the public.

Where a solicitor is registered with the SRA they may be a trained solicitor specialising in conveyancing, but will also have legal training in other areas of law. Whereas, a licensed conveyancer is only legally trained as a conveyancing specialist.

At this point it’s also worth thinking about your future business plans, including whether you may expand your conveyancing or other services years down the line. Of course, it’s possible to switch regulators later on – you may be planning to do so right now – but remember there are processes to follow with this, including amending your PII cover, which takes time and resources. If you are looking to change regulator speak to your PII insurers first to see what impact such a change might have on your business.

2. Cost is another key driver for firms but, as always, the devil is in the detail.

The SRA and CLC set their own fees for individuals and practices. Fees can change each year and, in both cases, are charged at a flat rate for individuals or calculated as a percentage of turnover for firms.

Alongside upfront fees, there could be other hidden costs associated with switching regulators. For example, staff may require additional training to bring them up to speed with what the new regulator expects, so an investment of fee-earners’ time is required.

Yet the additional training requirement shouldn’t be a barrier to switching regulators, especially if it upskills staff in areas that will promote future growth. Delivering training doesn’t have to be arduous either, thanks to the growing number of e-learning courses from Access Legal and others that enable fee-earners to reach the standard set out by the regulator in a time-efficient and engaging way.

3. Firms should understand the potential risks of switching regulators.

In particular, firms should consider whether it’s within their risk appetite and what could be done to prevent any issues emerging. In other words, it’s critical that you research each regulatory body in detail, and conduct your own risk assessment, in order to make an informed decision.

As well as the targeted training for staff mentioned above, your legal technology should allow you to manage all your compliance activities in one place, even as you move to a new regulator, ensuring complete visibility and auditability across your firm and confidence in meeting compliance requirements.

There are clearly pros and cons of both sets of regulations which you can use to argue the case towards your firm choosing either of them for your conveyancing needs. However, it should be noted that actually the expectations of both regulators are high and equally provide for exemplary service to your clients.