Insights from the 2025 Solicitors Conference

• We were joined by Frances Haque, Chief Economist at Santander
• It was really interesting to understand the many moving parts in the economy and how those parts impact on the things that hit us all in the pocket – especially around food price inflation, interest rates and mortgages
• We learned that sustained GDP growth has been a feature in our economy, even it hasn’t always felt that way if you read the newspapers, and it was encouraging to see that the professional services economy has remained more or less in this expansion zone over the past couple of years
• It was probably not a big surprise to hear that rising taxes have weakened the labour market but there are signs that it’s stabilising. Hopefully that will feed through to the legal sector!
• We’ll see how the Budget impacts everything, especially if we see interest rate cuts in 2026

• Robert Blech from MHA and Richard Nelson and Steve Roberts from Richard Nelson LLP were next up, and they gave us an update on the SRA’s consumer protection review and potential regulatory changes
• We were reminded of the recent ‘troubles’ in the legal sector and, of course, it’s been a pretty torrid time for the SRA. This has led to a real ratcheting up of the SRA’s approach to protecting consumer confidence.
• It was interesting to hear Richard’s views on third party managed accounts (TPMAs) and how they may not yet be able to offer the level of protection that the SRA thinks they will
• It’s likely that the SRA will revisit the idea of solicitors doing business without a client account, but is there a disconnect here between the commercial day-to-day reality of operating a law firm and the SRA’s hoped outcomes?
• Of course, all of this comes in the wake of Axiom Ince, but, as Robert said, it can feel at times that there is a risk of ‘punishing the whole class for actions of one child’
• It was encouraging to hear that there is value placed on the annual AR1, but perhaps the mechanics around whether these are all submitted, or having an annual declaration, need to be considered further

• Ian Johnson (that’s me) followed, and it was a tough act to follow
• I talked through the key findings from the latest law society financial benchmarking survey which Hazlewoods writes, and a big focus of my session considered the reliance on client interest and the need for firms to treat interest as a ‘nice to have’ bonus and not allow it to mask underlying failings in proper trading profit. Ensuring the ongoing quality of underlying trading profit is critical, and that is a challenge where fee earners are not recording chargeable time anywhere near capacity.

• Max Master from Kreston Reeves and Gus Teunissen-High from MHA were next up to give us some insights into succession planning for law firms, and there was so much to talk about and they both did a great job of squeezing it down to a sub one hour talk
• We enjoyed a comprehensive overview of succession planning from a risk and tax perspective and learned how, without proper planning, retirement plans can go out of the window. As Max said – it’s important to not just plan once and forget – firms need to plan and then regularly revisit their plan.
• Gus considered the tax implications of succession planning and reminded us how important it is that we get the practical stuff worked out before worrying about tax and structure

• Session 5 kicked off with a deep dive into AI, presented by Rob McCargow, Technology Impact Leader at PwC
• Rob gave us a really thought-provoking view on the importance of AI and really shone a spotlight on the gap between how effectively we think we use AI and the reality – it’s fair to say that about 70% of us barely use AI at all
• Rob cut through a lot of the white noise that we hear in the AI market and explored to what extent AI really will solve some of the problems that we think it should be solving. It is obvious from some of Rob’s stats though that AI, when harnessed properly across the workforce, can have a truly positive impact on revenue growth.

• Our penultimate session of the day, hosted by Jason Butcher, Client Director – Professional Risk at JM Glendinning, considered the legal insurance market
• Jason summarised what the recent cycle of PI insurance has looked like – moving from a really tough market coming out of COVID-19 into a thankfully softer market in the last year or so
• How long do we expect it to last is another story of course, and the claims activity still seems to be high, while severity of claims – so those that sit in the excess liability layer – seems to be increasing
• The 18-month policy is back on the table, with firms looking to lock in more favourable premiums over a longer period of time. The view seems to be that, if you can secure a decent rate, you should lock into it for as long as you can
• Tying in with what was discussed in the previous session, Jason pointed out that AI is becoming more of a talking point for insurers

• Wrapping things up for the day, we welcomed Janet Taylor of Taylor Mowbray LLP, who delivered our annual update on the SRA Accounts Rules and reminded us of the key points from the recent SRA consultation
• Janet also reminded us about ICAEW’s own technical release around application of the SRA Accounts Rules from the perspective of the reporting accountant, and the fact that this is going to be updated shortly
• Firms need to be absolutely aware that the SRA’s warning notice from last year concerning money incorrectly withdrawn from the client account has to be applied properly. It can be a more serious issue than some people think it is.
• Janet gave us a great summary of which breaches of the rules are still giving us a problem and which ones are hanging around and leading to qualified accountant’s reports. There are of course the three persistent offenders – residual balances, banking facilities and clients own accounts, and these are overlooked at one’s peril.

There is a lot to look forward to in the world of legal financial compliance, all of which builds towards another great conference next year!

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