The Law Society of England and Wales has confirmed it will discuss Solicitors Regulation Authority (SRA) proposals for changes to compliance rules at its upcoming annual general meeting in October.
The proposal to separate the roles of compliance officer for legal practice (COLP) and compliance officer for finance and administration (COFA) from individuals with decision-making power were first introduced in December 2025 as part of the SRA’s client money consultations.
At the time, the regulator explained it was seeking “appropriate checks and balances on an individual who has power within, and control over, a firm” in the wake of high profile failures at Axiom Ince and SSB Law.
The proposals have been heavily criticised as unworkable, with repeated calls for a review of the rules which require law firms with a turnover of more than £600,000 or which hold more than £2 million in client money, to prevent owners and senior leaders with the power to make unilateral decisions from COLP and COFA positions.
Responding to the consultation in February, the Law Society said the proposals are “complex and impractical and would impact small and medium sized firms unfairly by increasing costs which are likely to be passed on to consumers”.
It has now added its voice to calls for the SRA to pause implementation while further evidence is gathered, and scrap the £600,000 and £2 million thresholds in favour of a “targeted risk model” which would be informed by data the SRA already collects. The Law Society has also asked for further information about how the scheme would be implemented, given the impending January 2027 start date.
Last week, a new collective known as the SME & Boutique Law Firm Alliance published an open letter calling on the SRA to provide evidence of how the £600,000 threshold was reached and what the proposed restrictions on owner-managers will mean in practice.
Following a meeting between members of the collective and the SRA, members shared a statement expressing their disappointment at being left “with more questions than answers” following the discussion.
“A significant proportion of the meeting was devoted to explaining the proposals and their intended operation, matters which those attending already understood”, the founding member Jade Gani shared on LinkedIn.
“This left limited time for meaningful discussion of the evidence, proportionality and practical consequences underpinning the policy. In particular, we did not receive satisfactory answers to fundamental questions concerning the evidential basis for the £600,000 turnover threshold, the relationship between the proposed structural separation and actual client-money risk, or the evidence demonstrating that these measures would have prevented or materially reduced the risk of failures such as PM Law.
“We were also disappointed by aspects of the way the discussion was conducted. Representatives of affected firms must be able to challenge regulatory proposals robustly and ask difficult questions without legitimate concerns being curtailed or characterised as a misunderstanding of the rules.”
The members had “cause for concern” around the level of transparency offered by the regulator, Gani added.
The Law Society’s AGM will take place on Wednesday 14th October. Those wishing to attend must register their attendance by Friday 2nd October.
