So what is the cost of regulation?

15 October 2014, 1 pm

The Legal Services Board has launched a survey on the cost of legal services regulation, and it would like us all to take part. 

You’d have thought, wouldn’t you, that since the LSB is in charge of regulation, it would already know how much it costs without asking us?  But there you are: just one more thing to add to the pile of Things I Don’t Understand and Probably Have No Right To, which is a subset of the pile of Things I’m Not Going to Lose Any Sleep Over.

So what is the cost of regulation?  Well, it is the IPReg practising fee multiplied by the number of attorneys and entities that pay it.  Plus gazillions of pounds’ worth of chargeable attorney time spent drafting business terms and client care letters, working out what a complaints handling procedure should look like and whether the anti-money laundering regulations apply to them, and trying to persuade their bank managers to open client accounts when the bank managers’ Official Lists from Head Office say absolutely categorically no client accounts for numpties who are not lawyers.  Minus the cost of the things we no longer have to do now we are regulated, which is, well, which is negligible really.

(I would like to put it on record that my own firm has had no problem at all with preparing an Anti-Money Laundering Policy, an Anti-Bribery Policy, a Complaints Handling Policy, a We Love Diversity Policy, a Whistle-Blowing Policy, an Anti-Bullying Policy, a Cider at Work Policy, a Tractor Parking Policy and a Working on a Friday Policy.  Most of them can be summed up as “Don’t even think about it.”  We do not have a client care letter because I think that is a ridiculous notion.  The clients don’t care about us so I don’t see why we should care about them.)

It strikes me, however, that we should be careful how we respond to the LSB’s survey.  It would be tempting to say that regulation costs way too much.  But what if the LSB then says OK let’s reduce the cost by abolishing IPReg and let everyone be regulated by the SRA instead?  Surely there are economies of scale in this model, it might say.  And I do not think this is quite the outcome we had in mind.

It is depressing to hear that “deregulation” is now one of the LSB’s priorities.  Can you envisage a better way of keeping unemployment down and psychosis rates up than by tasking people with building a completely new system and then unbuilding it again afterwards like Lego®?  Especially if you make them issue umpteen consultation papers at each stage?  Was this just a magnificent government experiment into what happens when you try to interfere with the natural course of capitalism?

If nothing else, it has taught me that my firm should also have a Consultation Response Policy.  And it too should say, pretty much, “Don’t even think about it.”