Regulation by the CLC is tailored towards specialist conveyancing and probate lawyers who are committed to delivering high quality legal advice and client service.
The CLC’s model of regulation involves active and proportionate monitoring of practices. This helps to ensure that regulatory and legal compliance are maintained and that we deliver consumer protection and prevent consumer harm.
Our approach to monitoring helps the CLC and regulated practices identify risks and compliance gaps and ensure they are addressed promptly and appropriately.
Each practice has a Regulatory Supervision Manager or Officer who understands the practice and its history very well. They have excellent insight into the particular risks and challenges the practice faces.
As well as monitoring the practice’s compliance with regulatory and legal requirements, they are available to answer questions and provide advice on the full range of compliance matters.
This has contributed to the effectiveness of CLC regulation. Insurance brokers have said this effectiveness is reflected in lower professional indemnity insurance premiums for CLC-regulated practices.
What sets the CLC apart?
There are eight regulators of legal services in England and Wales, all overseen by the Legal Services Board.
The CLC is unique as the specialist regulator of the high volume and high value legal services of conveyancing and probate.
The CLC is an outcomes-focused regulator and practices can develop their own ways to deliver conveyancing and probate services to meet the regulatory requirements and develop thriving businesses that respond to their clients’ needs and preferences.
CLC regulation is itself sufficient to access the market, and there is no need to meet any additional requirements such as CQS.
The delivery of conveyancing and probate services poses specific challenges and risks. These services are highly commoditised but only used infrequently by consumers, who are unfamiliar with the conveyancing and probate processes. The CLC was established to increase competition and choice of legal services providers for consumers. Together, these factors have driven the CLC to tailor its effective model of regulation, which we describe as ‘managed compliance’.
The CLC is able to maintain close engagement with each practice and provide a nominated contact in the practice’s RSM/RSO.
You will be able to contact your RSM/RSO easily and they will answer your questions promptly and comprehensively.
The managed compliance cycle
The CLC sets high standards for individual lawyers and practices seeking regulation by the CLC and the managed compliance cycle begins before lawyers and practices enter CLC regulation. This page focuses on practices. The route for individual lawyers to enter CLC regulation can be found here.
What does it take for a practice to be regulated by the CLC?
The CLC welcomes applications from prospective startup practices being established by experienced conveyancing and probate practitioners.
The CLC also welcomes applications from existing specialist conveyancing or probate practices that are looking to move into specialist regulation.
The journey to becoming CLC regulated begins with our Licensing Team. They are very pleased to work with prospective practices to develop their thinking about moving to CLC regulation at a very early stage.
Whether yours is an entirely new or an existing practice, the CLC will need a good understanding of the practice and your plans as well as being confident that you have in place the policies, procedures and people to comply with CLC requirements from your first day of operation as part of the CLC regulated community. That includes having in place professional indemnity insurance that meets the CLC’s minimum terms and conditions.
To issue a practice licence, the CLC will need to be satisfied, among other things, in relation to:
- financing;
- ownership;
- operating model;
- experience and suitability of proposed CLC managers and key staff;
- trading and client profile (actual or planned); and
- ability to comply with requirements relating to Anti-money laundering, data protection, and the other regulatory requirements.
Your practice’s first year in CLC regulation
Every practice that enters CLC regulation undergoes a period of enhanced initial monitoring which includes:
- reviews of client and office account reconciliations at intervals throughout their first 6 months of trading;
- a meeting with their assigned Regulatory Supervision Manager or Officer (RSM/RSO) within the first six months of operation as well as support and advice when required.
- a full practice inspection on or around their first anniversary of being regulated by the CLC.
This process enables the early identification and resolution of any issues, thereby mitigating potential risk to consumers or the public interest.
Practices that have entered CLC regulation have spoken very positively about this approach, which gives them confidence that they are meeting the CLC’s requirements.
Maintaining compliance for client protection
The CLC’s managed compliance model includes zero tolerance of non-compliance. Where practices themselves or the CLC identify compliance gaps, the CLC requires them to be remedied promptly. If they are not, the CLC will take steps to enforce compliance and if warranted, take appropriate enforcement and disciplinary action. If the compliance gap has resulted in harm to clients, enforcement and disciplinary action may also be appropriate.
What we expect from practices each year
Throughout the year, the Regulatory Supervision team stays in close contact with practices and is available to answer questions and help address any risks or concerns practices have identified.
The CLC maintains a record of the risk profile of each practice. This will vary according to the types of work a firm undertakes, its business model, its compliance history, the findings and follow-up actions on recent monitoring work and inspections, accountants’ reports, the practice’s complaints history, insight from clients and information supplied by the practice.
The CLC collects information from practices at several points annually to ensure that the risk profile is up to date, to address any new risks in a practice or across the sector and to understand the health and stability of the regulated community.
Every year each practice will need to:
- Provide an accountant’s report that reviews the activities and management of the client account for the previous financial year.
- Provide a full response to the CLC’s Annual Regulatory Return questionnaire that gathers a wide range of data about the firm’s business, clients, policies and procedures. Some of these questions are consistent from year to year while others are introduced to provide insight on new and emerging issues in the sector.
- Engage with any thematic review – these are deeper dives into particular areas of risk aimed at ensuring that the CLC’s regulatory response is effective and proportionate.
- Ensure that individual lawyers are complying with the CLC’s ongoing competence requirements to keep the practice’s skills and expertise up to date.
Practice inspections are another constructive way that we maintain compliance
In addition to comprehensive desk-based monitoring, the CLC also has an annual programme of inspections.
Selection for inspection is based on the time since last inspection (which is a risk factor) and an assessment of all the risks identified in relation to each practice.
Roughly one quarter of practices will be inspected each year, and the inspection is most useful and effective for practices that engage actively with the process. After an inspection, practices receive an inspection report that identifies areas of non-compliance and an action plan to remedy any non-compliance identified to come back into full compliance within a short timeframe.
Failure or refusal to take the necessary steps to meet the CLC’s requirements and come back into compliance will result in further enforcement action.
Find out more about the CLC’s Managed Compliance processes
You will need to renew your practice licence annually
Each year, practices must also:
- Complete the annual licence renewal process.
- Pay the fee that is set each year to cover the costs of the CLC’s regulatory work, the oversight of regulation by the Legal Services Board. This is based on the practice’s turnover.
- Pay their share of the cost of complaints handling by the Legal Ombudsman (LeO). This includes a ‘polluter pays’ element so that practices with disproportionate levels of referrals to LeO shoulder more of the burden of complaints handling.
- Contribute to the Compensation Fund, calculated by reference to the practice’s turnover.
- Renew PII cover that is compliant with the CLC’s requirements. Insurance Brokers tell us that premiums for specialist practices in CLC regulation are lower than for their counterparts elsewhere.
