Solicitors Regulation Authority (SRA) data shows about 4,500 firms hold less than £100,000 while 3,500 firms hold more than £1m and some hold £1bn-plus of client money. Its consultation, ‘Client money in legal services’, which closes this week, suggests blocking solicitors entirely from holding client money. In the shorter-term, it would stop firms from retaining any interest and restrict the collection of fees in advance.
Responding, Law Society president Richard Atkinson said client accounts ‘have been used for decades by law firms with millions of successful transactions conducted each year.
‘They are fundamental to the efficient and effective delivery of most legal services. Removing client accounts may have huge ramifications for the quality of legal services including higher costs, delays and reduced access to justice.’ He said the SRA’s analysis ‘lacks evidence’ to support such radical reforms.
