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Increasingly rich mix of managers in CLC-regulated firms

09 March 2016

Section 18 of Legal Services Act 2007 defines “authorised persons” as persons authorised in respect of a given legal activity (such as conveyancing or probate) by a relevant approved regulator (such as the CLC), or licensed bodies authorised in respect of those activities. Whether they are Recognised Bodies or Alternative Business Structures, practices regulated by the CLC must have appropriately qualified managers. Until 2011 this would have meant one or more licensed conveyancers, at least one of whom held a CLC Manager’s Licence.  Now, with the advent of entity regulation and Alternative Business Structures, managers authorised by other legal regulators – and those who are not authorised persons at all – are becoming an important part of an increasingly diverse CLC-regulated community.

Table 1 shows the proportion of practices that have at least one manager with a particular kind of legal authorisation. Given that we are focusing exclusively on entities regulated by the CLC, it is to be expected that the great majority of practices would have at least one manager who is authorised to carry out conveyancing services, and there is a steady increase in the proportion of CLC practices with at least one manager who is a licensed conveyancer, from just under 85 percent of those in the lowest turnover band, to all of the practices in the highest turnover band.

There is a similar but even more evident increase in the proportion of practices that have at least one manager who is authorised as a solicitor, ranging from fewer than one in seven practices with a turnover of £100,000 or less, to three-quarters of those with a turnover in excess of £3,000,000. But this is not simply a case of turnover being a proxy measure for practices’ size, and practices with larger workforces being more likely to have greater numbers of managers, authorised by a wider range of legal regulators, because the distribution of barristers runs counter to this pattern. Although relatively few in number throughout CLC-regulated practices, barristers are concentrated in the smaller practices.

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Figure 1 shows the proportion of practices that have at least one manager with a particular kind of authorisation.

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While table 1 showed the proportion of practices with at least one manager with a particular authorisation, table 2 shows the proportion of managers with a particular authorisation in each turnover band. Looking at the top line, managers in the smallest practices by turnover are twice as likely to be licensed conveyancers as managers in the largest practices, with 67.6% of managers in practices with turnovers of £100,000 or less authorized as licensed conveyancers, compared to just 36.6% practices with turnovers over £3,000,000.

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Figure 2 shows the proportion of managers in all CLC-regulated practices, by authorisation.  The most surprising finding is that less than half of all managers in CLC practices are licensed conveyancers. The proportion of licensed conveyancers among managerial staff must be evidence of the increasing importance of entity-based regulation, where the focus is more on the outcomes of a practice’s work, than the individuals carrying it out. On the other hand, it should be noted that 87.2 percent of all CLC-regulated practices have at least one manager who is a licensed conveyancer (refer back to figure 1).

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Adapted from the CLC’s Annual Regulatory Return Analysis 2015.