We talk to Andrew Garbutt, Director of Risk at the SRA
Please give a brief background about yourself and explain your role at the SRA.
I started working in the Law Society group in 2005 working for the Legal Complaints Service before moving to the SRA when it opened in 2006. I started off building its quality and customer service team, had a spell as Head of the Conduct and Regulatory Investigations Unit and first got involved in risk when I set up the team that risk assessed incoming reports back in 2008.
I’m now Director of Risk at the SRA and head up the Risk Centre, where I lead the design and delivery of our approach to risk-based regulation. We need to effectively manage risk if we are to achieve our regulatory objectives, such as protecting the public and allocate our limited resources where the risks are highest.
- The SRA’s “Risk Outlook” was announced with a bit of fanfare. Why is it so significant? What were the key messages?
The Risk Outlook communicates what we see as the biggest risks to our regulatory objectives and explains why we’re focusing our resources on certain areas such as financial difficulty. In terms of key messages above all we want to show that we’re a regulator that takes a risk-based approach and that we expect the firms we regulate to take a similarly risk-based approach to their own business. If the Risk Outlook can help legal services firms to better identify and understand the risks facing their business and improve their own risk management activities, then even better.
- What are the biggest issues facing the legal profession that we are not currently talking about?
It’s no secret that the SRA is focusing on risk relating to financial difficulty as a priority at the moment. However, new information about drivers of financial difficulty is emerging all the time and our latest data is telling us that poor management is a big factor in financial difficulty at many firms. Identifying and managing the risk of a lack of management competence is certainly on our radar at the moment.
We’re also aware of issues emerging at a number of firms around cyber security and how firms mange the duty of confidentiality to their clients, particularly in the controls they have in place for out-sourced activities. The legal services community is definitely already talking about this, but it’s something the SRA will be gathering more evidence on in the future. We’ll be covering both of these points in more depth in our upcoming Risk Outlook Update, which will go out to the profession in November.
- What do you think the profession will look like in 10 years?
Consolidation of firms in the market, increased use of technology leading to more virtual firms and more flexible services to clients, and more multi-disciplinary practices are certainly likely. However, I think one of the biggest changes we’ll see is consumers being more active in shaping the market through things like comparison websites, and firms and regulators alike will have to respond to this if they want to remain relevant.
- If you had a blank piece of paper what would the regulatory framework look like?
We’ve recently been asked the same question by the Ministry of Justice as part of their consultation into the future regulation of legal services. The SRA’s position, and one that I agree with, is that the current regulatory framework can be confusing to consumers and could be rationalised to a framework with one regulator and one complaints body for all legal services. This should be supported by complete separation between regulator and representative body.
- What is the SRA’s greatest achievement to date, and what could be improved upon?
A senior colleague at the SRA once said to me that ‘our best work is never seen’ and I think this is true of the work of any regulator. We’ve worked with many firms facing serious financial problems to avoid intervention and implement changes that allow the firm to continue trading, which I see as a really positive achievement and one which I’m not sure those we regulate are aware of.
I’d also like to highlight the successful work done to ensure clients get their money back and their files protected when things go wrong.
In terms of improvement, I think becoming a truly risk-based outcomes-focused regulator is something we are really focusing on. We are currently investing a large amount of time developing the systems and culture that will shape the way we identify, assess and manage risks at firms and in the market as a whole. I get a great deal of satisfaction out of my role in that development.
- What would you say to the solicitor who thinks he or she is over-regulated and that in itself is a risk?
It is interesting how shocked many of the solicitors are when I talk to them about the issues we have to deal with and it can put a different spin on the need for regulation when some of the cases we have had to undertake hit the public domain.
I’d say that we put a lot of effort, more effort than the profession might imagine, into making sure that we direct our resources where they are most needed via our risk assessments. However, in order to do this, we need information – that’s the key ingredient that helps us identify whether a firm or a sector is high or low risk. Providing us with information in a timely and clear way allows us to spend much less time with the good firms and concentrate our resources on the minority of firms that take a substandard approach to looking after the interests of their clients.
I would like to assure those firms that are regulated by the SRA that, especially given my role, I want to deliver proportionate and targeted regulation where it is needed and also to make our regulatory activities far more proactive in a way that actually helps good firms to flourish.
- Give us a “top tip” relating to risk management.
Regularly exchange information with your managers, your fee earners, your administrators, and your clients. Only by getting the views of those involved in the everyday operation of your firm will you be able to understand what the risks are and how to manage them.
For more information about the SRA visit their website