The SRA has today published its annual Risk Outlook for 2021/2022. The report looks at what defines the ‘new normal: the shape of the legal market as it emerges from Covid-19 and gives the regulator’s view of the key changes, threats, opportunities and uncertainties that come from them.
As well as drawing attention to key issues and prompting law firms to refocus their compliance efforts, the risk outlook also serves as a key indicator of what the regulator’s current priorities are and what areas the SRA will focus their efforts on (such as cybercrime, financial crime, access to legal services, equality and diversity etc). It is therefore essential reading for law firm managers and compliance officers to ensure that your firm is alert to the key issues and make any necessary changes or additions to your risk register and the relevant policies and procedures. The risk outlook provides a useful trend analysis and aims to identify drivers of change to help the profession mitigate risks and avoid compliance problems crystalising.
Rather than the specific areas of compliance that were the focus of previous risk outlooks, the 2021/2022 edition concentrates on wider economic and political factors and how they impact the profession. The SRA has scanned the horizon and set out its view of the most significant changes for the legal sector and how they appear to be moving the market are set out in the section entitled ‘Forces for change’ and fall into four categories:
- Economic changes caused by the pandemic such as inflation, supply chain issues and general economic volatility;
- Political or regulatory changes, namely the actions of the government and the regulatory systems which will affect the ways in which the legal sector operates such as changes to dispute resolution, demand for more innovation and the increased use of digital services,
- Consumer behaviour, namely changes in consumer preferences and decisions and their effect on the services required, such as hybrid working, ethical demands and unmet legal need.
- Firm and market behaviour, namely the ways in which law firms’, and the whole legal sector’s responses to these drivers act as forces of change, including the increasing use of commercial technology, market consolidation and the cost of PI insurance.
To view the Risk Outlook, visit SRA | Risk Outlook 2021/2022 | Solicitors Regulation Authority.