The Solicitors Regulation Authority (SRA) has confirmed it will pause plans to separate the role of Compliance Officer for Legal Practice (COLP) and Compliance Officer for Finance and Administration (COFA) from individuals with “unilateral decision making” responsibilities, after push back from across the legal profession.
In a statement released today said Aileen Armstrong, SRA executive director – policy and strategy, said: “We appreciate and understand the concerns that have been raised about this rule change, particularly by smaller firms.
“We know that the profession supports our ambition to prevent consumer harm. Our aim, in line with the direction set by the LSB, is to tackle the harms that could arise where there are no checks and balances on individuals taking decisions in firms. Strong firm governance is an important protection in preventing consumer harm. However, we are aware of the risk of unintended consequences, particularly for smaller firms.
“We are pausing to take stock. Over the coming weeks, we will actively consult with stakeholders on potential options we are developing with a view to making necessary changes to our approach and achieving the objective in a proportionate way.”
In December 2025 the SRA consulted on proposals to effect “checks and balances on individuals who have significant power within, and control over, a law firm” as part of its wider client money protection agenda in the wake of Axiom Ince.
In June the regulator confirmed its intentions to press ahead with the separation of roles, agreeing updated wording to Rule 8.4 with the Legal Services Board, with implementation set to begin from January 2027.
But the changes prompted backlash from some in the sector, notably amongst small and medium firms who have argued the proposals disproportionately impact them. Speaking to this publication, Jade Gani, co-founder of newly established SME & Boutique Law Firm Alliance explained there was little evidence of why the thresholds at which the separation would be required had been arrived at. Both the turnover threshold (£600,000 p/a) and the amount of money held in client accounts (£2 million) was not inconceivable for small firms, particularly if they do conveyancing or private client work. The practicalities of separating the roles from “unilateral decision makers” is unworkable argued the Alliance and would result in firms having to outsource to (expensive) experts, or assign the roles to junior staff.
The Alliance had called on the SRA to pause the plans while it provided more evidence the proposals were the right option and lobbied the Law Society to add the item to the upcoming Annual General Meeting on 14th October. The Alliance further warned it would call for a motion of no confidence in the SRA leadership if there was no pause in the plans.
The Law Society has also been vocal in its opposition to the proposals. In its response to the consultation which included the proposals 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.”
Welcoming the decision to pause the plans, Law Society of England and Wales president, Mark Evans, said: “Plans to pause the compliance officer measures and consult solicitors with a view to making changes following serious concerns raised by the Law Society and the wider profession demonstrate the SRA’s willingness to listen and act when they have got it wrong. We are encouraged by this fresh level of maturity at the SRA under its new leadership.
“To ensure these measures benefit the profession, the SRA must make significant changes that reflect the concerns raised by members and by the Law Society in February.”
