Nobody is Friends with their Regulator

There is a disease known as consultation exhaustion. Yes we want to be consulted but no we don't want to spend our lives responding to consultations. Representative bodies like the Law Society and CIPA suffer greatly from it. I don't know the cure, but I can describe the symptoms.

Inbred Opposition (light touch?)

One particular symptom that worries me is Antagonism. The regulator proposes, and the regulated oppose. When the regulated are lawyers (for the purposes of this blog we are not talking about the European definition of lawyers but the English one which includes patent agents and registered trademark agents) they can readily dream up some grounds of opposition.

Take for example the opposition of the Law Society to the abolition of CPD  discussed here and now we have another bunch of oppositions  the Law Society has set out to the latest set of SRA consultations on what one would think was desirable deregulation.

The SRA suggested reducing minimum Professional indemnity insurance cover to £500,000. The Law Society opposes. IPReg does not have a minimum but except for litigators but suggests a £1 million. So patent agents have always had to think about what was an appropriate level of cover and I am sure that solicitors do too. As a solo practitioner, I have always included in my terms of trade a limitation of liability and I am afraid I hope to rely on it. Generally its to £1million and I haven't had any complaints. I received some terms from another firm today who were seeking to limit their liability to £5 million. So they can obviously afford bigger premiums than me. Perhaps they need them, the terms should have been sent to their client not me.  The Law Society is concerned that mortgage lenders will object to limitations of liability. Wouldn't it be better of the Law Society spent their time managing the expectations of such prospective clients than opposing the regulator.

For other matters your friendly Law Society opposes see here. In fact that doesn't seem anything that the SRA can do right, but there are a lot of closed consultations undergoing analysis.

In the current political environment, regulation is designed to protect consumers and business clients are expected to look after themselves. This has the desirable effect of meaning that for those of us who mainly deal with the business world, regulation can go back into the lightest touch box that we were used to.

Meanwhile, it would be nice if regulators and representative bodies could develop a slightly better relationship and just occasionally find some areas of agreement.

Risky Insurers?

Feather the nest to protect the vulnerable?

The Law Society has decided to warn solicitors that they need to check the financial strength of their insurers. Just because they are on the list of qualifying insurers, it doesn't mean that they have passed any financial stability tests.
They have produced a whole new guide to insurer insolvency which you can find here.

Just as with motor insurance, I anticipate that most solicitors regard insurance as an obligation that must be paid for. The idea of actually claiming on it is usually far from our minds. Indeed that's exactly what the insurers want as they exhort us to put in place risk reducing measures and raise the premiums of those with the temerity to claim.

One thing the Law Society press release is silent on is the benefit of inserting limitations of liability into terms of trade. Instead they publish further guidance on top-up and excess layer cover. I begin to wonder if they get commission from these spiralling insurance sales.

Surely the credibility of the *ratings* industry no longer exists in the realms of ordinary men after all those highly rated junk mortgage securities (Remember Northern Rock anyone?). Even so the SRA require that Insurers must now disclose whether or not they have a financial security rating and the provider of this rating. Here is their handy list. Only one firm, Travelers is prepared to deal direct and they even quote their minimum premium, £1,575 though that was last year.

For all the dire warnings, read the full press release.

Paying for the Privilege

The cost of a Practising Certificate from  the Solicitors Regulation Authority  (SRA) is £1180 (see page for details) for a  period that starts on 1 November and ends on 31 October

The IP Regulator (IPReg ) charges its fees for the calender year and the requests for payment are just going out. For an individual on both registers the fee was £250. There is also an entity fee. See the Practice Fee Regulations  which is a £100 for a SOLO entity but if you paid  before the rules were established was £500.

If you want to litigate or indulge in other reserved activities then you have no choice but there is a lot in the legal world that is not reserved. Non - contentious IP advice, patent and trademark preparation and filing in the UK are open for all, so we have to ask what is the point of being regulated if you have sophisiticated clients who do not need consumer protection.

Legal Professional Privilege is the only point. If you are happy that communications between you and your client can be disclosed in any subsequent litigation then it does not matter. Howver if your practice is likely to involve giving frank advice as to infringment risks and freedom to operate you might want to keep your privilege. One solution that some members have employed is to act as a consultant to a law firm when working on anything contentious.

The image is in the public domain and has the tag "privilege" which could well be the name of a club in Ibiza. It is quite definitely NOT an image of the IP Regulator.

Food for thought for IP lawyers

Times are tough – and in some ways, perhaps more so for sole practitioner solicitors in the increasingly onerous regulatory climate being imposed by the Solicitors Regulation Authority. Running a business for a ‘one man band’ is hard enough – never mind once you add into the equation an extra layer of compliance obligations.

Clearly the new era of regulation will make it untenable eventually for true sole practices to continue in business. This is already evident from anecdotal stories of lawyers being refused insurance to set up new sole practices. How many of us are now waiting anxiously to find out the new premiums our insurers will impose? It is traditionally one of the worst times of the year for small firms of solicitors. On top of that is the impending difficulty small firms are expected to face in responding to the new questions the SRA will ask at practising certificate renewal time.

So, when a fellow sole practitioner mentioned that he was considering closing his practice, paying run off cover, and re-establishing himself as an IP consultancy, I thought there must be a better way. Surely it should be possible for highly skilled IP lawyers to be able to use their skills and solicitor title without having to run their own businesses, or go and find a job in a law firm. Many lawyers simply want to get on with their client work. They are not interested in running a business, especially one which involves spending more and more time familiarising themselves with and implementing an array of new regulations.

Then it occurred to me that perhaps I could help my friend, and he could help me. I want to grow Azrights into a top notch IP and Technology practice , and would welcome experienced lawyers on board to help achieve this. By joining Azrights as self employed lawyers, my friend and others would be able to continue working as solicitors, based either at home, or in their own offices anywhere in the country. They would continue to act for their own clients, except that they would do so under the Azright brand.

Among the benefits to them would be leaving all the regulatory and client account headaches to Azrights to manage. We would also provide the IT and email infrastructure to enable remote working. An added bonus is our website and blog which will soon appear prominently in search engines, providing an excellent resource for marketing. Lawyers in the network will be part of a firm, and will have opportunities for interacting with each other and giving and getting cross referrals. Further benefits include access to administrative and junior legal staff so that there is the option to delegate work which should be done at a more junior level,.

Clearly there is a huge difference between the network of lawyers I have in mind for Azrights, and some other types of lawyer networks, which are really only agents collecting revenue from the fees generated by self employed lawyers. If any IP solicitors out there are interested in discussing the possibility of joining Azrights network please get in touch.

Calling all small firms of solicitors

In the face of the stream of weekly release of information in the Law Society’s Gazette, such as this news story that some Professional Indemnity Insurers are abandoning the legal market and refusing to insure small practices, and this one about how the SRA will be requiring a lot of information from firms which small practices are going to find difficult to supply I am getting increasingly concerned that the Regulatory climate around the corner is going to make it difficult for small law practices to focus on their work. I know a number of sole practitioners who work from home, do not hold a client account, and service a few long standing clients, and rarely take on new ones. These feel unconcerned about Money Laundering and all the rest of the obligations piled on Solicitors’ practices. Even news about the heavy handedness of the SRA when inspecting law firms does not move them. If ours is a group comprised predominantly of such practices then it is unlikely that the group will share my concerns. However, for those who would like to find a better way of practising without the stress and anxiety they currently face, I would like to convene a meeting to consider possible solutions. If you are interested in attending please email me here