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Section XX Delegated Authorities Framework Operating Guidance

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Section XX Delegated Authorities Framework Operating Guidance Powered By Docstoc
					                             MANAGEMENT BOARD

        The Management Board will meet at 10.30 on 14 January 2009
             in the Chancery room, 113 Chancery Lane, London

                                           AGENDA

1    Apologies and announcements                                                        10.30

2    Part 1 and Part 2 minutes of the meeting on 3                Attached
     December 2008
3    Matters arising
4    Preparation for Discussion with the Regulatory                                     10.35
     Boards
5    Reports:                                                                           11.00

     (i) Solicitors Regulation Authority Board Chair              Attached

     (ii) SRA Equality and Diversity – Progress                   Attached
     Report
     (iii) Compensation Fund – Recharging and                     Attached
     Reserve Setting
     (iv) SRA Enabling Programme                                  To follow
                                                                  Attached
     (v) Legal Complaints Service Board Chair
     (vi) Law Society Chief Executive                             Attached

6    (i) Management Accounts and other Financial                  Attached              12.20
     Reports
     This paper contains commercially sensitive data and is
     restricted under paragraph 14.9 of the Code of Practice on
     Freedom of Information to members of the Management
     Board and Council.
     (ii) Financial Protection Management Report                  Attached
     This paper contains commercially sensitive data and is
     restricted under paragraph 14.9 of the Code of Practice on
     Freedom of Information to members of the Management
     Board and Council.
7    Report of the Group Finance Director                         Attached              12.45
     This paper contains commercially sensitive data and is
     restricted under paragraph 14.9 of the Code of Practice on
     Freedom of Information to members of the Management
     Board and Council.                                                       (lunch at 1.00)

8    Project Tetra                                                Attached               1.30


9    Delegated Authorities                                        To follow              1.40
10   Renewal of Professional Indemnity Insurances                 To follow              1.50
11   Support Services Issues: New Mechanism for                     Attached   2.00
     Resolving Disputes
     This paper concerns formulation of policy and its
     dissemination is restricted to members of the Management
     Board and the Council under paragraph 14.7 of the Code of
     Practice on Freedom of Information.
12   Appointments to the SRA Board 2010                             Attached   2.15
     This paper concerns formulation of policy and its
     dissemination is restricted to members of the Management
     Board and the Council under paragraph 14.7 of the Code of
     Practice on Freedom of Information.
13   SRA: Outstanding Issues                                        Attached   2.30
     This paper concerns formulation of policy and its
     dissemination is restricted to members of the Management
     Board and the Council under paragraph 14.7 of the Code of
     Practice on Freedom of Information.
14   Reappointment of the Remuneration                              Attached   2.40
     Committee Chair
     This paper contains personal data and is confidential
     under paragraph 16 of the Code of Practice on Freedom of
     Information. Under paragraph 2(c) of the Code on Council
     members’ access to information, its dissemination is
     restricted to members of the Management Board.
15   Management Board Working Methods                               Attached   2.45
     This paper concerns formulation of policy and its
     dissemination is restricted to members of the Management
     Board and the Council under paragraph 14.7 of the Code of
     Practice on Freedom of Information.
16   Matrix Programme                                              To follow   3.00


17   Project Management Reporting                                   Attached   3.15


18   Group IT Primary Supplier Sourcing: New                        Attached   3.30
     Logica Contract
     This paper contains commercially sensitive data and is
     restricted under paragraph 14.9 of the Code of Practice on
     Freedom of Information to members of the Management
     Board and Council.
19   Risk Management - Corporate Risk Register                      Attached   3.40
     This paper concerns formulation of policy and contains
     commercially sensitive data and is restricted under
     paragraphs 14.7 and 14.9 of the Code of Practice on
     Freedom of Information to members of the Management
     Board and Council.
20   Part 1 and Part 2 Minutes of the Audit                         Attached   3.50
     Committee on 25 November 2008
21   Monthly Report on High Profile Litigation                      Attached   3.55
     This paper contains information that is subject to legal
     professional privilege and is confidential under paragraph
     14.8 of the Code of Practice on Freedom of Information. Its
     dissemination is restricted to Council members.

22   Any other business                                                        4.00
EXTRACT FROM THE GENERAL REGULATIONS

The terms of reference of the Management Board are –

Scrutiny of the Regulatory Boards

(1)      To carry out, informed by the Regulatory Affairs Board, the Council’s role in
relation to the regulatory boards including –

(a)    advising the Council on all matters relating to the terms of reference,
composition and appointment of those boards;
(b)    scrutiny of the regulatory boards’ draft business plans, and their performance
against those plans;
(c)    scrutiny of the regulatory boards’ budgets and budgetary control; and
(d)    scrutiny of the regulatory boards’ approach to risk management;

discharging the foregoing functions in a manner that reflects the principles of good
regulation, having taken account of the regulatory boards’ reasonable and
proportionate requirements.

Representative Board Business Plans and Budgets

(2)   To scrutinise the representative boards’ draft business plans, budget bids and
budgetary controls, ensuring that in their activities they secure value for money.

Law Society’s Overall Budget

(3)    To recommend to the Council the Society’s budget and business plan.

(4)     To recommend to the Council the level of the practising certificate fee and to
advise the Council in relation to SRA proposals in respect of compensation fund
levies.

Finances

(5)     To deal with all matters relating to the finances, facilities, property, subsidiary
companies, trusts, bursaries and bequests and the common seal of the Society, and
the effective management of resources, including -

(a)    financial controls;

(b)    human resources;

(c)    capital expenditure;

(d)    investment management;

(e)    the Society’s personnel policies and the staff pension scheme

(f)   approving bids for unbudgeted expenditure, subject (save in the case of an
emergency) to a maximum of £1 million.

Risk management

(6)    To approve and monitor the Society’s risk register
(7)    To oversee the handling of litigation arising from the Society’s functions, save
where this has been delegated to the regulatory boards.

Governance

(8)    To hold the Chief Executive of the Law Society accountable for the efficient
discharge of his duties.

(9)      To hold the Office-holders to account against the Presidential Plan.

(10)     To take all reasonable steps necessary to ensure the proper governance of
         the Society, including bringing proposals to the Council as necessary.




PROTOCOL ON THE OPERATION OF BOARD MEETINGS

The Board has adopted the following protocol:

      a. to discipline themselves to start on time, and limit lunch to 30 minutes;
      b. to reverse the order of the agenda on a regular basis so that the items dealt
         with first (which tend to get more time and attention) are not invariably
         regulatory items but finance and other matters which are currently taken
         towards the end;
      c. to exercise self-restraint and accept a convention on how often a member
         speaks on one topic and for how long;
      d. to challenge themselves and one another as to the relevance of what they
         say: is the question appropriate to the non-executive role? Is it a
         representative matter for another forum? Can it be adequately dealt with by
         e-mail or a conversation outside the meeting?
Posted on Corporate Business on 19 December 2008
as approved by the Chair


                                     MANAGEMENT BOARD
                          Minutes of the meeting on 3 December 2008
                   at 10.30 in the Breams Room, 113 Chancery Lane, London

                                                   Part 1

Present:           Philip Hamer, Chair

                   Andrew Caplen
                   Nick Fluck
                   Bob Heslett, Vice-President
                   Desmond Hudson, Chief Executive (except minutes 65-66)
                   *Linda Lee, Deputy Vice-President
                   Paul Marsh, President (minutes 64-70)
                   Sue Nelson
                   *By telephone

LCS/SRA            Shamit Saggar, Chair of the LCS Board (minutes 67 and 70)
                   Deborah Evans, Chief Executive, LCS (minutes 67 and 70)
                   Antony Townsend, Chief Executive, SRA (minutes 67 and 70)
                   Graeme Holt, Interim Head of Finance and Performance, SRA (minutes 67 and
                   70)
In                 Rona Chester, Group Finance Director (minutes 64-70)
attendance         Flick Heron, Council and Board Administrator
                   Steve Jeffree, Group Chief Information Officer
                   Lorraine Jones, Director of Group Human Resource and Development
                   (minutes 64-70)
                   Mark Paulson, Head of Constitutional Affairs (minutes 71 and 73)
                   Sheila Spicer, Director of Change, Delivery and Performance Excellence
                   Russell Wallman, Director of Governmental Relations
                   Brian Hughes, Chair of the Scrutiny Committee (minutes 71 and 73)

64        APOLOGIES AND ANNOUNCEMENTS
          Apologies were received from Peter Adams and Tim O’Sullivan.

65        PART 1 MINUTES OF THE MEETING ON 29 OCTOBER 2008

          The Part 1 minutes of 29 October 2008 were approved.

66         MATTERS ARISING
          There were no matters arising.

67         REPORT OF THE SOLICITORS REGULATION AUTHORITY
           BOARD CHAIR
          The Board noted the report which detailed progress on business
          planning and the budget, the equality and diversity strategy, risk
          management, assurance processes for procedures and internal
          controls and IT projects.




Management Board 3 December 2008                                                            43
       With regard to the annex which cross-referenced the SRA’s equality
       and diversity action plan with Lord Ouseley’s recommendations, it
       was noted that the action under point 2 should make clear that the
       composition of the SRA Board was determined by the Society and
       not the SRA Board itself.

68     FIXED ASSETS
       Rona Chester introduced the report which detailed historical
       weaknesses in the Society’s fixed asset system and the results of a
       fixed asset review and proposed methods to improve the system.

       A physical review of fixed assets categorised as ‘equipment and
       furniture’ and ‘computers and hardware’ had been carried out which
       revealed that equipment and furniture were currently recorded at
       around £8m which was considered to be an ‘over-vaulation’ of
       around £6.7m over its value, whereas computers and hardware were
       probably undervalued by around £1.8m. A write-off to correct the net
       imbalance was proposed. There was capacity in the budget to allow
       this without affecting the PC fee, although it would impact on the
       level of reserves.

       To avoid a repetition of the inaccuracies, a new system of identifying
       the useful economic lives of assets was proposed, along with
       reversion to a manual system of recording asset values until the
       TETRA project, which would bring about an improved IT system, was
       complete.
                                                                                Rona Chester/
       The Board approved:                                                      Darren Styler

           1. the proposed write-off of fixed assets in the sum of
              £4,963,134;
           2. the proposed fixed asset accounting policies in respect of
              useful economic lives of assets and depreciation; and
           3. the proposed system and control changes.

69     DELEGATED AUTHORITIES
       This report was withdrawn from the agenda.

70     FEES AND CONTRIBUTIONS FOR RECOGNISED BODIES
       MARCH 2009 TO OCTOBER 2010
        Antony Townsend introduced the report which proposed transitional
        arrangements for charging recognised bodies’ application fees and
        compensation fund contributions in preparation for the advent of
        legal disciplinary practices (LDPs) under the Legal Services Act
        2007. It was expected that provisions allowing establishment of
        LDPs would come into force on 1 March 2009.

        A consultation on the proposals was underway which would close on
        8 December. The proposals were based on changing the current
        three-yearly charging policy to an annual one until November 2010
        when it was expected that a new fee and contribution structure
        would be introduced.




Management Board 3 December 2008                                                                44
        Board members were concerned about how the proposals would
        affect sole practitioners operating small businesses who would incur
        a sharp rise in charges, and asked that the issue be brought to the
        attention of the Equality and Diversity Committee given that BME
        practitioners could be disproportionately affected. Antony Townsend      Antony Townsend
        was asked to prepare a statement explaining the rationale behind
        this aspect of the proposals which could be supplied to practitioners.
        He advised that the charge for sole practitioners would not begin
        until July 2009 and he would give the matter further consideration
        before the RAB and Council were asked to decide on it.

        The Board also asked SRA to consider implementing a manual               Antony Townsend
        system to identify recognised bodies with non-solicitor managers so
        that they could be charged a higher fee to reflect the fact that the
        non-solicitor managers did not pay an individual practising fee.

        The Board also expressed concern about being asked to make a
        decision before the consultation had finished and questioned
        whether a decision was urgent, given that systems could be set up
        before the figures to be required to make a contribution to the
        Compensation Fund.

        Subject to further consideration by SRA of the matters above
        relating to sole practitioners and different charges for bodies with     Alison Crawley/
                                                                                 Antony Townsend
        non-solicitor managers, the Board agreed to recommend that
        Council under rule 2(2) of the Solicitors' Compensation Fund Rules
        [2009], prescribe the contribution payable by a body applying for
        recognition as:
               (a)    £80 on applying for initial recognition or renewal of
                      recognition to commence in the period March to June
                      2009, and

               (b)    £40 on applying for initial recognition or renewal of
                      recognition to commence in the period July to October
                      2009,

        the renewal date for any such recognition being 31 October 2009 in
        accordance with regulation 8.7 of the SRA Recognised Bodies
        Regulations [2009]; and

               (c)    £120 on applying for initial recognition or renewal of
                      recognition to commence in the period November
                      2009 to February 2010,

               (d)    £80 on applying for initial recognition to commence in
                      the period March to June 2010, and

               (e)    £40 on applying for initial recognition to commence in
                      the period July to October 2010,

       the renewal date for any such recognition being 31 October 2010 in
       accordance with regulation 8.1 of the SRA Recognised Bodies
       Regulations [2009].




Management Board 3 December 2008                                                             45
       The Board also noted that the SRA was to determine the fees
       payable by a body applying for recognition or for approval of an
       individual as suitable to be a manager or for appeal against a
       decision not to so approve an individual.

71     COUNCIL MEETINGS OUTSIDE LONDON

       The report responded to a request from Council members for
       consideration to be given to holding more Council meetings outside
       London and commented on the reasons why this might be justified
       and the cost implications.

       The Board agreed that the Council should consider the report without Mark Paulson
       any recommendation from the Board.

72     PART 1 MINUTES OF THE AUDIT COMMITTEE ON 23
       SEPTEMBER 2008

       The Board noted the minutes which covered the committee’s
       membership, the timetable for preparation of the Society’s 2008
       accounts, the purchase to pay system, risk management within the
       SRA and progress on the 2008-9 internal audit plan.

       The Board noted that the minutes had taken a long time to prepare.

73     ESTABLISHMENT         OF     THE      PERFORMANCE           REVIEW
       COMMITTEE
       Brian Hughes, Chair of the Scrutiny Committee, introduced the
       report, advising that Des Hudson had attended the Committee to
       discuss proposed terms of reference (ToRs) for the Performance
       Review Committee with a view to making them less prescriptive. Des
       Hudson had proposed alternative ToRs at paragraph 2.2 of the
       report, while the Committee proposed its own ToRs at annex 2.

       The ToRs in Annex 2 included powers for the Committee to call for
       information and attend Board meetings. The reference to
       recommending changes to Board workplans was intended to enable
       items which were not progressing to be removed. The Committee did
       not intend that performance review would be invasive. Section 3 of
       the report detailed how performance review would work in practice.
       The Committee was keen to begin the work of performance review
       but wanted a clear remit.

       Board members were concerned that the ToRs in Annex 2 were still
       too prescriptive with a list of powers that was unnecessary and did
       not set the right tone. It was suggested that the performance review
       function should not concentrate on review of minutes.

       Upon being put to the vote, the Board unanimously rejected the
       recommendations at Annex 2.

       The Board agreed to recommend to Council:                               Mark Paulson


           (i)   the terms of reference in paragraph 2.2 of the report
                 subject to the deletion of the words ‘scrutinise and’ under



Management Board 3 December 2008                                                              46
                  paragraphs 34(1) (a) and (b) and the correction of
                  ‘reviewed’ to ‘renewed’ in 34 (2).

           (ii)   the proposed operating methods for performance review
                  in section 3 of the report.

74     ANY OTHER BUSINESS

       Sue Nelson believed that too many agenda papers were being
       classified as confidential. Russell Wallman suggested that errors
       arose in that the classification was being used when a paper related
       to formulation of policy regardless of whether consideration of the
       issue in public would hamper the free and frank exchange of views.

       The Board requested that the Information Compliance Manager
                                                                      Bob Stanley/ Mark
       undertake a review of the matter and that the Chairs’ Handbook Paulson
       contain necessary guidance on the issue.




Signed: ……………………………….                      Date: ……………………………………

Philip Hamer
Chair, Management Board




Management Board 3 December 2008                                                    47
MANAGEMENT BOARD
14 January 2009                                                              Item 5 (i)


Classification – Public


Purpose – For noting

REPORT OF THE CHAIR OF THE SOLICITORS REGULATION
AUTHORITY BOARD


The Issues

This paper is the periodic report of the Chair of the SRA Board. The report focuses on the
areas specified in the Management Board’s terms of reference.

Remit

The Board’s terms of reference (1) ‘To carry out, informed by the Regulatory Affairs
Board, the Council’s role in relation to the regulatory boards’.

Policy Position

N/A

Financial and Resourcing implications

There are no direct implications to the report. Paragraphs 2-4 of the report deal with the
budget and business planning and paragraphs 7-10 deal with the IT Programme.

Equality and Diversity implications

There are no direct implications to the report. Paragraph 5 of the report refers to the
equality and diversity strategy.

Consultation

This report has been prepared directly for the Management Board.


Author:                Peter Williamson, Chair SRA Board
Date of report:        January 2009
       Overview

1.     Since the last report to the Management Board the SRA has finalised the business
       plan and budget for 2009. On 17 December the Council approved the budget and
       noted the Plan.

       Business planning and budget

2.     The principal changes to the latest version of the Plan were the introduction of key
       milestones and measures for the key deliverables for 2009, a more detailed
       rationale for the proposed headcount increase, a description of the need for better
       management data, and a proposed review in the first quarter of 2009 following
       completion of the IT business case.

3.     At its meeting in November the Board briefly discussed the need to develop
       further the SRA’s business planning and scrutiny arrangements. The Scrutiny
       Committee has been considering the need for improvement of business planning
       arrangements, and a review of those arrangements will be discussed by the Board
       at its January meeting.

4.     The further consideration in January will include:

                1. improvements to the business planning process;

                2. improved support for the Scrutiny Committee;

                3. proposals for the further development of Key Performance Indicators
                   and activity based costing;

                4. the need to ensure that the Board has sufficient time to deal with
                    strategic issues throughout the year; and

                5. the respective roles of the Board, the Scrutiny Committee and the
                    Executive, and the possible role of a Finance Committee.

       Equality and diversity strategy

5.     This is the subject of a separate report to the Management Board.

       Risk

6.     The position on the development of risk management across the SRA is as
       follows:

           1.       The strategic risk register is live, updated at least quarterly and more
                    frequently, depending upon individual risk circumstances and risk level.

           2.       Following risk awareness training and individual risk
                    identification/action planning workshops, risk registers have been
                    created for each directorate. It is expected that the risk registers will
                    become fully accessible and go live in the week commencing 5
                    January 2009.

           3.       Work is continuing to finalise risk ‘action plans’ for those key risks
                    where further work is required to reduce the consequences of risk
                    materialising.
Management Board 14 January 2009 Item 5(i)                                                   2
            4.     A Risk Forum has been established and met for the first time on 23
                   December 2008. It is made up of representatives from each Directorate
                   who will act as ‘risk champions/co-ordinators’. These individuals will
                   amongst other activities, be responsible for monitoring and updating
                   their directorate’s risk register. The Forum will meet on a quarterly
                   basis with the first formal meeting in January 2009.

            5.     A draft risk management policy and risk management process guide
                   have been developed and are currently out for comment prior to formal
                   approval.

            6.     Further work continues on identifying suitable risk register software for
                   the risk registers which is more suitable and user friendly to replace the
                   existing arrangements.

       IT

7.     It has been agreed that the SRA IT Programme should be renamed the SRA
       Enabling Programme to reflect the fact that it will deliver both IT and other change.
       At the last SRA Board meeting it was reported that the definition phase was
       making good progress and that the business case would be ready for submission
       to the IT Executive Committee on 23 December.
8.     A number of principles have been established within the programme and
       encapsulated in the business case, namely that new systems and processes must
       deliver the statutory regulatory obligations of the SRA, must support the five
       strategic themes for the SRA agreed by the Board, must be agile enough to meet
       the regulatory needs of the rapidly changing legal services landscape, should
       deliver in line with the Group IT Strategy of the Law Society, should be a business-
       led programme and should reduce the proportionate cost of regulation

9.     The likely investment required over the next two years, together with some early
       indications of the achievable benefits, were becoming apparent. In broad terms,
       investment funding (external costs only) of £4.8m is likely to be sought for 2009
       with further investment funding (external costs only) of £4.5m, subject to a further
       business case, at the end of 2009.

10.    The headline benefits will be the achievement of the statutory obligations of the
       Legal Services Act 2007 (renewal of LDPs, ABS regulation, etc.) and the EU
       Services Directive, greater business efficiencies through on-line processing of
       applications, improved case management and workflow, lower administrative
       overheads, more resilient systems and a significantly improved consumer
       experience. Upgrading to new systems in line with the Group IT Strategy will also
       bring greater flexibility, modern functionality and reduced risk.

       Communications strategy

11.    At its meeting in December, the SRA Board considered and approved the latest
       draft of the SRA’s Communications Strategy and associated Action Plan for 2009,
       developed with the assistance of the external media and parliamentary
       consultants.

12.    The Strategy contains the following principal elements:

            1. the communications objectives linked to the themes in the Strategic Plan
               and to the Equality & Diversity Strategy;

Management Board 14 January 2009 Item 5(i)                                             3
           2. the principles which will underpin the SRA’s communications;
           3. the audiences to be addressed and the key messages to be delivered to
              them; and
           4. the major communications challenges for 2009.

       Referral Arrangements

13.    In December the Board conducted its promised annual review of referral
       arrangements and referral payments. In essence, the Board voted not to reimpose
       an immediate ban on referral payments and agreed:

             1.   to ask the Rules and Ethics Committee to review in the light of the
                  Board's discussion what, if any, changes (including those referred to in
                  the paper) need to be made to Rule 9, including consideration of the
                  relationship between Rule 9 and Rule 1.
             2.   to refer to the Rules and Ethics Committee the continued prohibition on
                  arrangements with introducers that charge contingency fees for them to
                  consider in the light of the Civil Justice Council review.
             3.   to authorise the development of a further compliance, enforcement and
                  communications strategy in consultation with the Compliance
                  Committee.
             4.   to use the firm-based recognition process to seek information and
                  compliance declarations on referral arrangements.
             5.   to write to the Legal Services Board to support a review by it of referral
                  arrangements across the legal services sector, as proposed by the Law
                  Society.




       Peter J Williamson
       Chair, SRA Board

       January 2009




Management Board 14 January 2009 Item 5(i)                                             4
MANAGEMENT BOARD                                                           Item 5 (ii)
14 January 2009


Classification – Public


Purpose – For noting

SRA EQUALITY AND DIVERSITY – PROGRESS REPORT
The Issues

This report provides an update on the progress made against the SRA’s E&D
Strategy.

Remit

The Board’s terms of reference (1) ‘To carry out, informed by the Regulatory Affairs
Board, the Council’s role in relation to the regulatory boards’.

Policy Position

Not applicable.

Financial and Resourcing implications

There are resource implications with progressing the strategy. In relation to Equality
Impact Assessments (EIA), it is very likely that resources will be required when
carrying out full EIAs.

Equality and Diversity implications

Successful implementation is essential in ensuring we are in line with our obligations
and duties and meeting our action plan.

Consultation

The SRA’s E&D Strategy and Strategic Action Plan were open for consultation from
26 September to 23 December 2008.



Author:               Mehrunnisa Lalani
Date of report:       December 2008
           Equality and Diversity – Progress Report

Introduction

1  The Management Board approved the SRA’s first Equality and Diversity Strategy
   and action plan at its meeting on 24 September.
2 The Equality and Diversity Strategy is the SRA’s initial response to Lord
   Ouseley’s report.
3 The strategy provides the framework for the SRA to progress equality and
   diversity across all six areas of diversity.
4 The strategy will enable the SRA to comply with the public duties on race,
   disability and gender, and will enable it to move beyond compliance to being a
   regulator that has the confidence of all those it regulates, its staff and consumers.
5 The Board agreed that the draft strategy should be published for consultation
   internally and externally.
6 Meetings with key equality practitioner groups, including the main BME
   representative groups have been held to gain feedback on the strategy.
7 The external consultation closes on 23 December and the board will receive a
   final strategy for approval during its meeting on 22 January 2009. The SRA
   Board will also receive a two year action plan against which progress will be
   measured.
8 The SRA has committed itself to reporting publicly on progress being made on a
   quarterly basis.
9 Although the strategy is under consultation the SRA has begun to progress some
   of the actions within its action plan.
10 This is the SRA’s first report on progress made against its E&D strategic action
   plan.



Annexes

Annex 1        Equality and Diversity Strategy – Progress report
Annex 2        SRA Board Equality and Diversity Group – Terms of Reference

Author         Mehrunnisa Lalani
               Head of Policy (Inclusion)

Date           December 2008




Management Board 14 January 2009 Item 5(ii)                                            2
Annex 1
             Equality and Diversity Strategy – Progress report

The SRA as a fair and diverse employer of choice

Objective                                Progress
1. We will develop and implement         An initial meeting (2nd September) has been held with the Director
   human resource and                    of HRD who has provided a commitment to integrating equality
   development (HRD) policy and          and diversity (E&D) into HRD policy and practice. She has agreed
   practice that enable us to recruit,   to undertake Equality Impacts Assessments as part of the HRD
   develop and retain a diverse          policy review.
   workforce at all levels.
                                         The Head of Policy (Inclusion) has been consulted on a couple of
                                         the HRD policies under review and has provided advice as
                                         appropriate.

                                         The SRA HRD team is using diverse recruitment approaches to
                                         attract applicants from a diverse background.

                                         The SRA has been awarded the Two Ticks symbol (Positive About
                                         Disability) which will enable us to continue to progress equality for
                                         people with disabilities in employment (18th November).

                                         The SRA is currently developing proposals to identify how best to
                                         increase the black and minority ethnic (BME) representation in the
                                         SRA’s work. Positive action proposals on recruitment and
                                         retention will be developed early next year for consideration.

2. We will embed equality and            Antony Townsend, CEO, held staff briefings across the SRA on
   diversity into the culture of the     the Ouseley report and the E&D Strategy. The first four sessions
   organisation.                         were attended and supported by Lord Ouseley. 458 staff attended
                                         the briefings. A DVD has been created for those unable to attend
                                         the briefings.

                                         Directorate Business Plans for 2009 have an emphasis on E&D
                                         which provides a good framework for mainstreaming E&D.

                                         Equality and diversity competencies have been integrated into the
                                         competency framework for the organisation’s staff.

                                         The E&D strategy was published for internal consultation (22nd
                                         September) to which there was a 28% response rate, although
                                         over 50% of staff accessed the strategy. An analysis report is
                                         being prepared for consideration by SMT and the findings will be



Management Board 14 January 2009                                                                        3
                                        reported to the Board.

                                        The CEO now chairs the internal staff Diversity Working Group
                                        whose members come from the various directorates. The role of
                                        the group is to discuss issues of equality, share best practice and
                                        monitor progress.

                                        The SRA Board established a sub group comprising the Chair of
                                        the Board, a lay member and two solicitor members. The group is
                                        called the SRA Board E&D Group and its role is to provide
                                        oversight on E&D progress (see Appendix 1).

                                        The group meets monthly and the meetings are attended by the
                                        CEO and the Head of Policy (Inclusion), who reports monthly to
                                        the group on progress against the E&D strategic action plan.

                                        The CEO and senior management team (SMT) attended a one
                                        day course on Race / Diversity Competency (20th October). The
                                        SMT has since discussed the strategy and action plan and their
                                        role in progressing the work.

                                        The newly appointed adjudicators have had initial E&D training
                                        (30th October) and further development is being planned.

                                        In the Information directorate all temporary agency staff, who are
                                        recruited to assist in the Practising Certificate renewal period,
                                        receive E&D training.

                                        The SRA newsletter is being used to communicate E&D messages
                                        to staff.

                                        We are currently identifying a provider to undertake an E&D
                                        Training Needs Analysis.

The SRA as an open, fair, transparent, non-discriminatory and proportionate regulator

Objective                               Progress
1. We will develop and implement        An Equality Impact Assessment (EIA) schedule has been
   policies and practices that do not   published to ensure that policies are impact assessed at the
   unjustifiably discriminate against   outset.
   any group within the profession.
                                        Every paper, policy or proposal being submitted to the Board now
                                        has a risk template that identifies potential equality impact at the
                                        outset.

                                        Ongoing training is being provided to staff within the organisation
                                        when undertaking EIA’s.

                                        An initial EIA on decision making has been carried out (October).


Management Board 14 January 2009                                                                       4
                                       An initial paper on transparency and disclosure has been
                                       considered by the compliance committee.
2. We will engage with BME and         Since the publication of the E&D strategy for consultation, the
   other key equality target groups    Head of Policy (Inclusion) has met:
   to better understand their          • Society of Asian Lawyers
   concerns and issues.                • Black Solicitors Network
                                       • British Nigeria Law Forum
                                       • Association of Muslim Lawyers
                                       • Group for Solicitors with Disabilities
                                       • Association of Women Solicitors (by phone)

                                       Other organisations, such as the Association of Asian Women
                                       Lawyers, MIND, RNIB, the National Autistic Society and the
                                       Equality and Human Rights Commission, have been asked for
                                       their feedback on the strategy and action plan.

                                       The aim of the engagement with the equality target groups was to
                                       gain feedback on the E&D strategy and to identify priorities and
                                       opportunities for collaborative working.

                                       The Chair of the Board, the CEO and the Head of Policy
                                       (Inclusion) attended a meeting at the Equality and Human Rights
                                       Commission with BME stakeholders to progress the strategy.

                                       Other consultations which have taken place and have been in
                                       collaboration with equality target groups have been new
                                       application procedures for the approval of a new partnership and
                                       for the approval of a non-lawyer manager. The Group for
                                       Solicitors with Disabilities has also provided feedback on the
                                       changes to the Legal Practice Course.

                                       Regular meetings with BME stakeholder groups, the Group for
                                       Solicitors with Disabilities and the Association of Women Solicitors
                                       are being planned for next year.

                                       The CEO and some Board members attended the Black Solicitors
                                       Network Ball (21st November).

3. We will provide support and         The engagement with BME groups has identified opportunities for
   information that is accessible by   collaborative working and we will be publishing a schedule of
   all parts of the profession.        events for next year.

                                       Information on our website has been made available in alternative
                                       formats.

                                       We have held a workshop event with the Black Solicitors Network
                                       (10th December).



Management Board 14 January 2009                                                                     5
                                       THE SRA roadshow in Harrow was very successful and was
                                       attended by a high number of BME solicitors. Further roadshows
                                       will take into account geographical location and will also involve
                                       more diverse marketing.

                                       We have recently put additional guidance on the website in
                                       connection with the interim changes and we have launched a
                                       substantive consultation on ‘Revising the QLTR’.

4. We will collect, monitor and        The SRA has launched a Diversity Census to update our diversity
   analyse the delivery of our         data on the profession. This improved data is essential for the
   regulatory activities.              SRA to be able to evaluate and analyse our regulatory activities
                                       and plan regulatory events and consultations. Phase 1 of this data
                                       collection exercise is an online questionnaire which is being
                                       hosted by an online provider. We are collecting data on: age,
                                       gender, ethnicity, disability, religion or belief, sexual orientation
                                       and trans gender.

                                       We have sought advice from the Equality and Human Rights
                                       Commission in order to ensure that the monitoring categories are
                                       correct and that the way in which the questions are asked and the
                                       way the questionnaire is structured is satisfactory.

                                       Some key stakeholder groups have provided supporting
                                       statements to assist in marketing the census.

                                       Phase 2 of the Diversity Census will be launched in March/April
                                       2009, which will be a paper version of the questionnaire and will
                                       be posted to all non-respondents.

                                       A system to monitor the profile of informants is also being
                                       implemented.

5. We will develop and implement a     We have implanted an interim complaints protocol across the
   complaint-handling policy that is   organisation for the handling of discrimination complaints. Staff
   independent, objective and          who will be acting as investigating officers have received initial
   transparent.                        training on handling discrimination complaints (13th October and
                                       16th December).

                                       The complaint handling function will be transferred to the policy
                                       (Inclusion) Unit and a complaint handling policy will be developed
                                       next year.

                                       The aim of the interim protocol is that it will provide the
                                       organisation with a more independent process for investigating
                                       discrimination complaints. A complaint will be investigated by an
                                       Investigating Officer in another directorate from the one the
                                       complaint originated in. The protocol is an interim measure until
                                       the whole of the complaint function is reviewed in January 2009.



Management Board 14 January 2009                                                                      6
                                        All discrimination complaints are monitored by equality strands in
                                        order that any trends can be identified.

6. We will ensure that equality and     Positive action was taken to attract diverse applications for the
   diversity is embedded in our         Disciplinary Proceedings Panel recruitment. E&D requirements
   procurement policy and               were integrated into the tendering documents and are a
   procedure.                           requirement across the recruitment process.

                                        Similar positive action will be taken in relation to intervention agent
                                        tenders.

                                        The procurement policy is a central TLS policy. The SRA has been
                                        proactive in integrating E&D into any procurement it undertakes
                                        and carries out.



The SRA as an inclusive and consumer-focused organisation

Objective                               Progress
1. We will work towards being an        We are planning to undertake research as part of our consumer
   organisation that is seen by its     engagement work. The research commissioned will also elicit
   employees, those we regulate,        views on the basis of ethnicity and disability.
   consumers of legal services and
   the wider public as being            We are developing a consumer engagement policy to ensure that
   inclusive, fair and transparent in   we consult and engage in an inclusive manner.
   the way it carries out its work.
                                        We have implemented a protocol for dealing with requests for
                                        reasonable adjustments and alternative formats and languages.

                                        The E&D strategy has been published and, where requests are
                                        made, alternative formats can be provided.

                                        Our website is designed to comply with web content accessibility
                                        guidelines and is accessible to disabled users using assistive
                                        technologies. A web survey has been completed to gain feedback
                                        from users on the usability and accessibility of the website and to
                                        understand the profile of people that use the website. The results
                                        are currently being analysed and will be used to inform the EIA on
                                        the website.

                                        All consultations are monitored by quality strands in order for any
                                        trends to be identified.

Progress on Equality Impact Assessments
Published EIA’s:

•   Trainee solicitor minimum salary – full EIA
•   Revised guidance to the Qualified Lawyers Transfer Regulations – initial EIA


Management Board 14 January 2009                                                                         7
•   Proposed Changes to rules and regulations to enable legal disciplinary practices and other
    changes made by the Legal Services Act 2007 – initial EIA
•   Practising certificate applications made under section 12 of the Solicitors Act 1974 – initial EIA
•   Waivers of Solicitors’ Code of Conduct – initial EIA
•   Impaired capacity – initial EIA

Completed (pending quality assurance from Policy (Inclusion) Unit):

•   Excluded matter policy – initial EIA
•   Complaints handing – initial EIA
•   Criminal Records Bureau – initial EIA
•   Code for Referral to the SDT – initial EIA
•   Conduct outcomes and criteria – initial EIA
•   Non-employee recruitment – initial EIA

EIAs in progress:

•   Communications strategy – initial EIA
•   Corporate framework for risk management and control – initial EIA
•   Route to registration, (pre-admission trainee processes) qualification and admissions – initial EIA
•   Practice Standards Unit – full EIA
•   Section 12 applications – full EIA
•   Intelligence gathering policies / processes (FCIB) – initial EIA
•   Matter based investigations – initial EIA
•   Decisions to intervene – initial EIA




Management Board 14 January 2009                                                                          8
Annex 2


SRA Board Equality and Diversity Group
Terms of reference

•   The group will be responsible for providing the strategic oversight of the implementation of
    the SRA's Equality and Diversity Strategy

•   To discuss diversity issues and risks

•   To receive and approve progress reports to ensure the action plan is being implemented
    and achieved

•   To act as a catalyst for change by championing equality and diversity issues on the SRA
    Board.

Membership
Chair                       Peter Williamson, Chair of the Board

Members                     Penny Owston, Board member
                            Stephen Whittle, Board member
                            Yvonne Brown, Board member

Staff in attendance         Antony Townsend, Chief Executive
                            Mehrunnisa Lalani, Head of Policy (Inclusion)

Links
The group will liaise with and establish links with the following:

•   Internal Staff Diversity Working Group

•   Equality and Diversity Committee of the Law Society

•   Any other relevant group that can help to progress the group’s work.




Management Board 14 January 2009                                                               9
MANAGEMENT BOARD
14 January 2009                                                               Item 5 (iii)


Classification – Public

Purpose – For decision


COMPENSATION FUND – RECHARGING AND RESERVE SETTING
The Issues
In May 2008 the Chair of the SRA Board agreed to bring papers to Council identifying policy
options and making a recommendation for Compensation Fund (CF) recharging and reserve
setting.

The papers at annexes 1 and 2 to the attached Council report address separately the
proposed principles for recharging and reserve setting, but it is felt that they should be
considered together because of their close relationship.

These principles, once agreed by Council, will be used to inform proposals for the setting of
the Compensation Fund contribution later in the year.

Decision
In annex 1 the Council is asked to accept the recommendation of the SRA Board to make
recharges against the CF only for the direct costs of its administration and to fund the wider
costs of regulation from practising certificate income.

In annex 2 the Council is asked to accept the recommendation of the SRA Board to maintain
the CF reserve at a minimum of 1.5 x the average annual value of claims plus the estimated
value of 3 months’ recharges. (The Council may also wish to consider whether, to reduce
fluctuations in contributions from year to year, it would prefer to set the reserve figure at
twice the average annual value of claims, but the SRA does not consider that that is
required on regulatory grounds.)

The Board is invited to give its views on the recommendations.

Remit
The Board’s terms of reference (5)    ‘To deal with all matters relating to the finances …of
the Society’.

Policy Position
Existing policy will require amendment in line with the Council’s decision.

Financial and Resourcing implications
Accepting the recommendation in annex 1 to the Council report would reduce the full CF
contribution requirement by approximately £217 and increase the full practising certificate
fee by approximately £122.

Equality and Diversity implications
The effect of adopting the proposals in annexes 1 and 2 to the Council report would be to
spread the total regulatory financial burden (i.e. Compensation Fund contributions and
Practising Certificate fees) more evenly across members of the practising profession. The
recommendations are not expected to have a disproportionate impact upon particular
groups.

Consultation
The SRA Board has considered the issues and the papers contain its recommendations.
The Regulatory Affairs Board considered the issues on 16 December 2008 and its views are
detailed within paragraph 4 of annexes 1 and 2.


Director:      Rob Adams
Author         Rob Adams
Date           5 January 2009




Management Board 14 January 2009 Item 5(iii)                                                2
COUNCIL
28 January 2009                                                               Item NN


Classification – Public

Purpose – For decision


COMPENSATION FUND – RECHARGING AND RESERVE SETTING
The Issues
In May 2008 the Chair of the SRA Board agreed to bring papers to Council identifying policy
options and making a recommendation for Compensation Fund (CF) recharging and reserve
setting.

The papers attached at annexes 1 and 2 address separately the proposed principles for
recharging and reserve setting, but it is felt that they should be considered together because
of their close relationship.

These principles, once agreed by Council, will be used to inform proposals for the setting of
the Compensation Fund contribution later in the year.

Decision
In annex 1 the Council is asked to accept the recommendation of the SRA Board to make
recharges against the CF only for the direct costs of its administration and to fund the wider
costs of regulation from practising certificate income.

In annex 2 the Council is asked to accept the recommendation of the SRA Board to maintain
the CF reserve at a minimum of 1.5 x the average annual value of claims plus the estimated
value of 3 months’ recharges. (The Council may also wish to consider whether, to reduce
fluctuations in contributions from year to year, it would prefer to set the reserve figure at
twice the average annual value of claims, but the SRA does not consider that that is
required on regulatory grounds.)

Policy Position
Existing policy will require amendment in line with the Council’s decision.

Financial and Resourcing implications
Accepting the recommendation in annex 1 would reduce the full CF contribution requirement
by approximately £217 and increase the full practising certificate fee by approximately £122.

Equality and Diversity implications
The effect of adopting the proposals in annexes 1 and 2 would be to spread the total
regulatory financial burden (i.e. Compensation Fund contributions and Practising Certificate
fees) more evenly across members of the practising profession. The recommendations are
not expected to have a disproportionate impact upon particular groups.




Management Board 14 January 2009 Item 5(iii)                                                     3
Consultation
The SRA Board has considered the issues and the papers contain its recommendations.
The Regulatory Affairs Board considered the issues on 16 December 2008 and its views are
detailed within paragraph 4 of annexes 1 and 2. The Management Board was consulted on
14 January.


Director:      Rob Adams
Author         Rob Adams
Date           5 January 2009



Annexes
Annex 1:       Council Paper - Recharges against the Compensation Fund
Annex 2:       Council Paper – Compensation Fund Reserve Setting




Management Board 14 January 2009 Item 5(iii)                                          4
COUNCIL                                                                            Annex 1
28 January 2009                                                                    Item NN

CLASSIFICATION – PUBLIC

PURPOSE – FOR DECISION


            Recharges against the Compensation Fund
Introduction

1.   In May 2008 the Chair of the SRA Board agreed to bring a paper to Council identifying
     policy options and a recommendation for recharging to the Compensation Fund (CF)
     the cost of regulatory operations.

2.   Ultimate responsibility for setting the CF contribution currently sits with Council. This
     paper sets out the SRA Board’s recommended policy to recharge to the CF only those
     costs which directly relate to its administration.

3.   This report contains, for comparison, analysis of the existing position and one further
     option for reducing recharges.

Consultation

4.   The recharges paper presented to the SRA Board in December was also considered
     by the Regulatory Affairs Board on 16 December 2008. The view of the Regulatory
     Affairs Board was that the effect of the proposal on recharges would disproportionately
     affect PC fee payers and that the policy should not be changed before there had been
     a full review of methods of charging for regulatory activity generally.

Recommendation

5.   The Council is asked to accept the recommendation of the SRA Board to make
     recharges against the CF only for the direct costs of its administration and to fund the
     wider costs of regulation from practising certificate income.

Background

6.   For many years, the Law Society’s policy has been that a percentage of the
     operational costs of delivering regulation should be recharged to the CF. There is a
     monthly transfer from the CF into the operating accounts which is based upon a
     percentage of the costs incurred by business functions during the period. Examples of
     recharges which do not relate specifically to administration of the fund are shown
     below.




Management Board 14 January 2009 Item 5 (iii)                                                   5
       Description                         Basis of recharge
       Interventions Team                           34%

       Cost Recovery Team                           54%
       Forensic Investigation                       70%
       Fraud Intelligence                           60%
       Legal Fees - Intervention                    100%
       Investigation Casework Team                  45%
       Statutory trusts distribution                60%

      Annex A shows the full table of budgeted recharges for 2009 and how these relate to
      the recommended policy and other options described in paragraphs 15 to 24 of this
      paper.

7.    When considering annual CF contribution setting, comments have frequently been
      made in Council about the level of contributions set and the recharges made for
      administration of the fund.

      In particular:

        “The cost of the CF contribution is too high”

        “The costs charged to the CF are disproportionate to the sums paid
         in grants”

8.    Internal audit, when reviewing the recharges in 2006, raised concerns about the
      subjectivity of recharging the cost of functions for which the impact upon the CF cannot
      be measured. They accepted that there was provision within the Act for making
      recharges but recommended that a review should be undertaken.

9.    In carrying out the initial review of recharging in 2007 the SRA’s Financial Protection
      Committee (FPC) agreed with the views expressed by some members of Council and
      recommended that only those costs directly attributable to administration of the fund
      should be recharged.

10.   Using the current policy, estimated recharges against the CF in 2009 will be
      approximately £14.9 million of which £2.3 million relates to the direct cost of CF
      administration. All other recharges relate to either interventions or a percentage of the
      cost for carrying out a range of regulatory functions which may influence reduction of
      claims against the fund.

11.   Provisions currently exist in Section 36A of the Solicitors Act for these recharges to be
      made. The Legal Services Act 2007 extends the provisions to include the full costs of
      interventions.

      The relevant subsections of the Act are:

      36A Compensation funds:

        (8) A compensation fund may be applied by the Society for the purposes mentioned
            in subsection (9) (in addition to the making of grants in respect of compensation
            claims).


Management Board 14 January 2009 Item 5 (iii)                                                   6
           (9) The purposes are:

                (a) payment of premiums on insurance policies effected under subsection (6);
                (b) repayment of money borrowed by the Society for the purposes of the fund
                and payment of interest on any money so borrowed;
                (c) payment of any other costs, charges or expenses incurred by the Society in
                establishing, maintaining, protecting, administering or applying the fund;
                (d) payment of any costs, charges or expenses incurred by the Society in
                exercising its powers under Part 2 of Schedule 1;1
                (e) payment of any costs or damages incurred by the Society, its employees or
                agents as a result of proceedings against it or them for any act or omission of its
                or theirs in good faith and in the exercise or purported exercise of such powers.


Recharging principles

12.      The SRA Board has agreed principles which it believes should be applied when
         considering the appropriate level of recharges.

         These are that:

            •   recharges against the CF should only be made for those activities which can
                directly be attributed to its operation and protection;
            •   the cost of regulation functions which do not exist primarily to protect the CF
                should be funded by the profession as a whole rather than from targeted
                contributions from those who hold clients’ money.

13.      In establishing the principles the primary concerns were that:

           •    no clear evidence exists to demonstrate what percentage of the wider functions
                of regulation reduce calls upon the CF;
           •    none of the wider functions of regulations currently recharged to the fund would
                cease or be reduced if the CF did not exist.

         For example:

           •    Sixty percent of the cost of the Fraud Intelligence Team is currently recharged to
                the CF. Analysis of risk indicators has shown that only a very small percentage
                of initial intelligence gathered and processed by the SRA will lead to reduced risk
                to the Compensation Fund. A precise value cannot be applied to this.

           •    Seventy percent of the cost of the Forensic Investigations Unit is currently
                charged to the CF. Such investigations can lead to some form of action but only
                a very small percentage lead to interventions resulting in claims. There is no
                precise measure for this.

    14. Both of these functions are part of the tool kit used by the SRA to regulate and both
        would operate if the CF did not exist. There is no method to determine how much of
        the cost of these functions should be charged to the CF. If there was, this would be
        likely to change annually adding complexity to the financial planning process.



1
    Part 2 of Schedule 1 of the Solicitors Act 1974 provides intervention powers.
Management Board 14 January 2009 Item 5 (iii)                                                         7
Recommended policy - recharging the cost of CF administration.

15.   Applying the principles stated in paragraph 12 the SRA Board recommends that the
      policy should be to recharge to the CF only the costs of its administration. The CF
      exists to protect clients from loss and it is therefore entirely appropriate that the direct
      costs of maintaining it are borne by solicitors who hold client money.

16.   The effect of this would be to reduce the recharge against the fund from £14.9 million
      to £2.3 million. This would substantially reduce the annual cost of the full individual
      contribution to the CF. The difference, £12.6 million, would need to be collected from
      the practising certificate (PC) fee. The impact of this is shown in paragraphs 25 to 27
      of this report.

17.   By applying the SRA Board’s recommendation the Council will address the concerns
      highlighted in paragraph 7 which have in the past been raised at its meetings. This will
      also remove the issue of subjectivity outlined in paragraph 8 which has been raised by
      the Society’s auditors in relation to how much is recharged against wider regulation
      functions.


Recharging for administration and intervention costs

18.   An alternative approach would be to recharge the direct costs plus those costs which
      are clearly supported by statute and can be accurately accounted for. The Legal
      Services Act makes provision for all intervention costs to be recharged to the CF.
      Previously recharges could only be made where interventions were carried out on
      grounds of dishonesty.

19.   The effect of this would be to reduce the recharge against the fund from £14.9 million
      to £6.5 million. This would be reflected in a reduction in the annual cost of the full
      individual contribution to the CF. The difference, £8.4 million, would need to be
      collected from the PC fee. The impact of this is shown in paragraphs 25 to 27 of this
      report.

20.   The FPC’s working party spent some time trying to identify a suitable alternative to the
      recommended policy. This option is presented because it represents the middle
      ground in terms of financial adjustments and it is possible to reconcile intervention
      costs in the accounts; but the logic of its inclusion in relation to protection of the CF is
      flawed. Intervention does not, in many cases, lead to a call upon the CF. In 2008 45%
      of interventions have been on grounds of dishonesty (37% in 2007), not all
      interventions on grounds of dishonesty lead to claims and the number and value of
      claims made in relation to interventions on other grounds are relatively low.

21.   The SRA Board does not support this option because it does not comply with the
      second recharging principle. Intervention is part of the wider regulatory tool kit used by
      the SRA to mitigate further risk to the public by closing a practice and taking control of
      its accounts and files.

22.   If the Council chose this option progress would be made towards responding to the
      concerns highlighted in paragraph 7. This would also be compliant with audit
      requirements, outlined in paragraph 8, as intervention costs can clearly be identified in
      the accounts.




Management Board 14 January 2009 Item 5 (iii)                                                        8
Maintaining the existing policy position

23.   It would be possible to maintain the existing level of recharges against the CF.

      Possible grounds for this could be that:

      •     it is considered appropriate to target the wider cost of regulation at solicitors who
            hold client money.
      •     it is beneficial to recharge the cost of a wider range of regulation functions to the
            CF to avoid increasing the PC fee.

24.   The SRA Board does not support this option because it does not comply with either of
      the recharging principles. Additionally this would make no progress towards
      responding to concerns which have previously been raised by members of Council or
      mitigate the concerns of the Law Society’s internal auditors.

Financial impact

25.   The recharge to the CF contains the costs of operating a significant percentage of the
      SRA. Any reduction in recharges to the CF will need to be reflected by an increase in
      the practising certificate fee. Currently the equivalent of approximately 52,000 full CF
      contributions and the equivalent of approximately 103,000 full practising certificate fees
      are paid in the year. This means that for every reduction in CF contribution of £1 the
      PC fee will increase by 51 pence.

      Table 1: Allocation of CF contributions and of PC fees resulting from the
               recommended policy and alternative options in this paper.

                            Recharging criteria                       Individual   Increase
                                                                      Full CF      in
                                                                      Contribution Individual
                                                                                   Full PC fee
          Recommended       Direct costs of CF administration
                                                                            £43            £122
          policy            only
          Alternative       Direct costs + interventions
                                                                           £125            £81
          policy option
          Current policy    Maintain existing recharge
                                                                           £260             £0



26.   Table 1 shows that by implementing the recommended policy a solicitor who currently
      pays both the full CF contribution and full PC fee will be charged a total of £165. This
      is a reduction of £95 from the £260 CF contribution which would be required under
      current application of recharges. By transferring costs to the PC fee, the wider cost of
      regulation has been shared across a larger group than those who contribute to the CF.

27.   Table 1 also shows that by continuing to apply current recharging policy the impact
      upon individual CF contributions is substantial before any consideration is given to the
      amount of grants which might be paid during a practising year. It is this inflation of
      contributions through recharges which often leads to contentious debate when
      contributions are set annually. In making its recommendation the SRA Board’s
      intention is to make the methodology underpinning contribution setting both
      transparent and supportable.




Management Board 14 January 2009 Item 5 (iii)                                                       9
Recommendation

28.   The Council is asked to accept the recommendation of the SRA Board to make
      recharges against the CF only for the direct costs of its administration and to fund the
      wider costs of regulation from practising certificate income.


Annexes

Annex A:       Compensation fund recharges table
Annex B:       Equality and diversity statement
Annex C:       Regulatory impact risk assessment


Author:        Rob Adams

Date:          5 January 2009




Management Board 14 January 2009 Item 5 (iii)                                                10
                                                                                                             Annex A


COMPENSATION FUND RECHARGE COMPUTATIONS BUDGET 2009
The table below shows the estimated recharges which will be made against the
Compensation Fund in 2009. The three right hand columns show how recharges would be
made by taking the SRA’s recommended approach or by taking the two other options shown
in the paper.

Description                        Recharge Rate     Cost Centre              Current               Recharging the    Recharging the
                                                       Total                  Recharge             cost of CF        cost of CF
                                                                                                   administration    administration
                                                                                                   (Recommended)     and intervention
                                                                                                                     costs.
Compensation Fund Administration       100%               860,138.60                   860,139               860,139            860,139
IDU Administration                      30%               377,662.01                   113,299               113,299            113,299
Discipline                              30%             1,148,291.10                   344,487
SRA Legal                               30%                        -                         -
Interventions Team                      34%               380,341.08                   129,127
Cost Recovery Team                      54%               303,936.75                   162,700
Technical Support                       73%               261,665.68                   192,014               116,087           116,087
Forensic Investigation                  70%             4,480,589.23                 3,136,412
Fraud intelligence                      60%               761,967.84                   457,181
Adjudication                          12.53%              624,991.65                    78,288                78,288            78,288
Casework policy                      Fixed rate of £500 per month                        6,000                 6,000             6,000
CAIO (ICT)                              45%             1,345,699.23                   605,565
Post Intervention Unit                  54%               299,494.60                   161,727
Stat Trust Project                      60%               541,418.99                   324,021
SRA Archives                             7%               829,549.93                    61,869
Finance                                100%                30,000.00                    30,000                30,000            30,000
Registration                         Fixed rate                    -                   100,000               100,000           100,000
                                                                                     6,762,827              1,303,812        1,303,812




Legal fees (Dishonesty)                                                              4,134,802                               4,134,802

                                                                                     4,134,802                               4,134,802




Input VAT rrecoverable                 100%                        -                     549,864              20,335           454,489

                                                                                         549,864              20,335           454,489




Coventry Archives ( Facilities)       18.75%                       -                      27,456              27,456            27,456
Coventry Archives (Premises)          18.75%                       -                      64,791              64,791            64,791
Tachbrook 2                            38%                         -                      46,066              46,066            46,066
Ipsley Court                            7%                         -                      41,935              41,935            41,935
Tachbrook 1                            32%                         -                     209,814             209,814           209,814
                                                                                         390,062             390,062           390,062



Paybill & Operating Costs                                                            7,702,753              1,714,209        2,148,363
Audit Fee                                                                               25,000                 25,000           25,000
Income Taxation                                                                        230,000                230,000          230,000
Legal fees                                                                           4,134,802                      -        4,134,802
Overheads                                                                            2,839,873                317,668          317,668
Total                                                                               14,932,428              2,286,876        6,855,832
                                        Full Year Forecast (ex Legal Fees)          10,797,626              2,286,876        2,721,030

                                        Full Year Forecast (inc Legal Fees)         14,932,428              2,286,876        6,855,832


Management Board 14 January 2009 Item 5 (iii)                                                                        11
                                                                                      Annex B


Equality and Diversity template

Name of the paper/proposal/policy               Recharges against the Compensation
                                                Fund

Author                                          Rob Adams

Date                                            11.11.2008

Board/committee it will be submitted to         Council

Date of submission                              28.01.2009

What are the main aims of the paper/proposal/policy?

To set policy for making recharges for the cost of regulation against the
compensation fund.

Is the paper/proposal/policy likely to negatively or positively affect any
particular groups?
   Yes            No       This is not known (please give details below)

The recommended policy may benefit some solicitors in small practices. Some of the
cost of regulation would be more widely spread across the profession rather than
borne by only those solicitors who hold client money. There would be a negative
financial impact on firms where no client money is held and some firms where the
total number of solicitors employed is more than twice the number of those in the
who hold client money.

Please indicate if there are any implications on the basis of race, age, gender,
disability, religion or belief and sexual orientation.

None identified.

What are the potential equality and diversity implications?

None identified

Has an initial equality impact assessment been carried out?
   Yes (please attach to this form)        No (please provide details below on when
                                       this will be carried out)

If not, when do you intend to carry out an initial equality impact assessment
and bring to the committee?

It is anticipated that changes to recharges would take effect from 2010. Impact
assessment of these and changes resulting from introduction of firm based regulation
will take place prior to introduction.

Board/committee decision and date




Management Board 14 January 2009 Item 5 (iii)                                             12
                                                                                      Annex C



                       Regulatory Impact Risk Assessment


              Recharges against the Compensation Fund


Recommendation from the paper

 1. The Council is asked to accept the recommendation of the SRA Board to make
       recharges against the CF only for the direct costs of its administration and to fund the
       wider costs of regulation from practising certificate income.

Impact

 2. The recommended policy will redistribute the cost of regulation across a wider group
    within the solicitors’ profession.

         •   Solicitors and lawyers holding client money will benefit from a reduction in
             compensation fund contributions but will pay an increased practising certificate
             fee

         •   Solicitors who do not hold client money will pay an increased practising
             certificate fee.

       For every £1 reduction in full individual compensation fund contribution it is estimated
       that the full individual practising certificate fee will increase by 51 pence.

 3. Limiting recharges against the compensation fund only to the cost of its administration
    will provide improved visibility of how contributions are used.

 4. The level of practising certificate fee will more accurately reflect the wider cost of
    regulation.




Author          Rob Adams

Date            11 November 2008




Management Board 14 January 2009 Item 5 (iii)                                                13
COUNCIL                                                                            Annex 2
28 January 2009                                                                    Item NN

CLASSIFICATION – PUBLIC

PURPOSE – FOR DECISION


                Compensation Fund – Reserve Setting
Introduction

1. In May 2008 the Chair of the SRA Board agreed to bring a paper to Council identifying
   policy options and making a recommendation for Compensation Fund (CF) reserve
   setting. For this purpose the reserve is the amount which it is estimated will remain in the
   CF in September at its lowest point before the collection of annual contributions.

2. Ultimate responsibility for setting the CF contribution currently rests with Council. This
   paper sets out the SRA Board’s recommended policy to maintain a minimum reserve of
   1.5 x average annual grants paid plus the estimated cost of maintaining the fund for three
   months from the end of September to financial year end.

3. This report includes consideration of three options: setting the reserve at the same as the
   average value of annual grants paid; setting the reserve at one and a half times the
   average value of annual grants paid; and setting the reserve at twice the average value
   of grants paid. The SRA Board considers that setting the reserve at 1.5 times is the
   minimum required for regulatory purposes, but that it should be a matter for the Council,
   in its representative role, to consider whether there is advantage in setting the reserve
   levels higher than 1.5 times.

Consultation

4. The reserve setting paper presented to the SRA Board in December was also considered
   by the Regulatory Affairs Board (RAB) on 16 December 2008. The view of the
   Regulatory Affairs Board was that maintaining the reserve at twice average grants paid
   was the most appropriate policy. RAB felt that the resulting smoothing effect on
   contributions would be beneficial.

Recommendation

5. The Council is asked to accept the recommendation of the SRA Board to maintain the CF
   reserve at a minimum of 1.5 x the average annual value of claims plus the estimated
   value of 3 months’ recharges.




Management Board 14 January 2009 Item 5(iii)                                                 14
Reserve setting principles

6. The CF provides discretionary protection for clients from loss, where other redress is
   unavailable, due to a solicitor’s or firm’s:
      • failure to account for client moneys
      • dishonesty resulting in theft or misuse of client moneys

   The primary purpose of maintaining a reserve in the CF account is to make sure that
   there is adequate money available to pay all grants from the fund authorised during any
   practising year.

7. The SRA Board considered the following principles for setting the minimum level of
   reserve which should be maintained:

       •   Public protection will be maintained
              ─ No grant payment will be delayed or reduced because money is
                  unavailable from the fund.
              ─ No grant will be refused on grounds of inadequate funding.

       •   Excessive demands upon contribution payers will be minimised
              ─ Substantial year on year changes to contribution levels must be avoided.
              ─ Payment of a second contribution during any practising year must be
                 avoided.

     The Board endorses the first of these principles which is consistent with its primary
     objective as the regulator. When considering the second principle the Board agrees
     that collection of a second contribution during the year should be avoided as this would
     potentially delay grant payment to clients. It is a matter for Council whether substantial
     year on year changes to contribution levels should be avoided, since that is a
     representative rather than regulatory issue.

Base calculation for reserve setting

8. The SRA Board’s recommended reserve setting policy and two options presented in this
   paper all use the same base calculation as their starting point:

       •   Average grants paid – the average annual grant payment total over the last 7
           years.

           plus

       •   3 months’ estimated recharges - to cover the cost of recharging to the CF
           between the end of September and the end of December.


Setting the minimum reserve at the average value of grants paid

9. One option is to maintain the reserve at a level which provides basic protection to clients.
   This option is considered to be unacceptable by the SRA Board because it provides
   inadequate mitigation against the risk of having to collect supplementary contributions
   during the practising year (with associated costs), and the risk of delaying payments to
   clients.

   This option has previously been supported by some Council members:


Management Board 14 January 2009 Item 5(iii)                                                 15
   “it is better for this money to be in the pockets of solicitors where they can use it rather
   than in the reserves of the Compensation Fund”

10. Based upon the current profile of claims and recharges this is a target minimum reserve
    of £16 million. Of this £13 million would be used to cover higher than forecast growth in
    grants during the year and £3 million would cover recharge costs to year end.

11. The SRA Board does not support this option. It risks payments to clients being delayed
    because of the need to call upon the profession for a second contribution in the practising
    year. The Board’s view is that this is unacceptable in all but the most extreme
    circumstances.

Setting the minimum reserve at 1½ times average grants paid

12. The SRA Board recommends that the compensation fund reserve is set at 1½ times
    average grants plus the value of recharges to year end. This provides an appropriate
    level of client protection without significant risk of further contributions being required
    during the practising year.

13. Based upon the current profile of claims and recharges this is a target minimum reserve
    of £22.5 million. Of this £13 million would be used to cover higher than forecast growth in
    grants during the year; £6.5 million would be used to smooth the impact on contributions
    of recovering from growth in claims and £3 million would cover recharge costs to year
    end.

   The benefits are that:

       •   there is a high level of assurance that clients will be protected;
       •   all grants can be funded without further contributions collection during the year
           from the profession in most circumstances.
       •   limited growth in grants can be subsumed by making small adjustments to
           contributions;
       •   interest received from the reserve can be treated as a deduction in the calculation
           for contribution setting.

Setting the minimum reserve at 2 times average grants paid

14. Based upon the current profile of claims and recharges, maintaining a minimum reserve
    of two times average grants would give a target minimum reserve of £29 million. Of this
    £13 million would be used to cover higher than forecast growth in grants during the year;
    £13 million would be used to smooth the impact on contributions of recovering from
    growth in claims and £3 million would cover recharge costs to year end.

15. The benefits of this option are that:

       •   clients will be protected;
       •   all grants can be funded without further contributions collection during the year
           from the profession in all but the most extreme circumstances;
       •   based upon historical data, significant increases in grants could be subsumed by
           making small adjustments to contributions;
       •   interest received from the reserve can be treated as a deduction in the calculation
           for contribution setting.



Management Board 14 January 2009 Item 5(iii)                                                      16
16. Since the Board’s regulatory requirements are met by setting a minimum reserve at 1.5
    times average grants paid, in the Board’s view it is a matter for Council, exercising its
    representative function, to decide whether it wishes to set the reserve at 1.5, twice or
    even higher. When the paper was reviewed by the Regulatory Affairs Board, setting the
    reserve at twice average grants paid was their preferred option.

Using stop loss insurance to protect the fund

17. Marsh have given advice on the suitability and cost of purchasing catastrophe cover for
    the CF. They have provided a guide to what might be achievable based upon limited
    information available. A brief description of the analysis from Marsh is attached at Annex
    A.

18. The advice from Marsh was that the terms available would not be attractive and the
    benefits limited. Marsh’s assessment was that the prospect of a viable scheme was poor
    and currently difficult to justify economically for a scheme which could be effectively
    funded through contributions. The SRA Board does not recommend that this option is
    explored further.

Financial impact

19. A model based upon grants paid over a 7 year period between 2001 and 2007 was used
    to compare the impact of the alternative reserving policies. This period was chosen
    because it reflected a cycle where grants paid in individual years had been both high and
    low. The maximum annual grants value in the period was £20 million and the minimum
    £9.47 million.

20. Chart 1 shows how contributions would need to be adjusted to maintain an appropriate
    reserve for each scenario. Year 1 shows the contributions which would be required at
    the end of the first practising year if the reserves at the start of the year reflected the
    recommendation and alternative options in this paper.
    Chart 1
                            Impact on CF contributions of reserving options over a 7 year cycle

                                           450


                                           400


                                           350


                                           300

       Reserve @ 2 x average grants        250
       Reserve @ 1.5 x average grants
       Reserve @ 1 x average grants        200


                                           150


                                           100


                                            50


                                                0
                                                    Year 1   Year 2   Year 3   Year 4   Year 5   Year 6   Year 7
                 Reserve @ 2 x average grants        260      260      280      280      280      280      280
                 Reserve @ 1.5 x average grants      260      370      260      280      280      260      240
                 Reserve @ 1 x average grants        358      400      228      294      280      184      210




Management Board 14 January 2009 Item 5(iii)                                                                       17
21. The model shows the impact of having the capacity to smooth contributions over a period
    of time despite significant fluctuations in grants paid. Total contributions paid over the
    seven year period range between 2,200, for a reserve including twice the average value
    of grants paid and 2,274 for a reserve including the average value of grants paid.


Relationship between the reserve and contribution setting

22. Maintenance of the reserve is one consideration which must be taken into account when
    setting the annual contribution. Further items included in calculation of contributions are:

        •   analysis of the economic climate.
        •   the estimated value of claims looking forward over a 3 year period
        •   estimated transfers from statutory trust accounts
        •   interest received
        •   recharges against the CF

   A further paper on contribution setting will be brought once principles have been
   established for setting the reserve and recharge levels against the CF.

Recommendation

23. The Council is asked to accept the recommendation of the SRA Board to maintain the CF
    reserve at a minimum of 1.5 x the average annual value of claims plus the estimated
    value of 3 months’ recharges.



Annexes

Annex A:       Stop Loss Insurance guidance
Annex B:       Equality and diversity statement
Annex C:       Regulatory impact risk assessment

Director:      Rob Adams

Author:        Rob Adams

Date:          29 December 2008




Management Board 14 January 2009 Item 5(iii)                                                  18
                                                                             Annex A



Stop loss insurance guidance

1. The Compensation Fund Working Party instructed Marsh to advise on the suitability and
   cost of purchasing catastrophe cover for the CF. With very little information to work on,
   other than estimations by the Fund itself for subscription setting purposes, Marsh sought
   to ascertain some feel for likely costs.

As a guide, based on Marsh’s experience, the following might be achievable:

     RISK TRANSFER

     Period of Insurance:              3 years

     Retention by the Fund:            £60m in the aggregate for all claims
                                       during the 3 year Period of Insurance

     Limit:                            £20m (excess of the £60m retention by the Fund)

     Co-Insurance:                     10% - in respect of the limit of £20m, once
                                            the aggregate retention has been exhausted, the
                                            Fund would be required to pay 10% of each
                                            insured claim.

     Maximum Loss any one firm:        £2m

     Term Premium:                     £1.5m to £2m


These are Marsh’s best estimates given the absence of detailed loss data and actuarial
modelling. As an enhancement it should be possible to secure cash flow protection by
means of a funding facility at Libor plus 300 basis points.

The advice from Marsh is that, even if it was possible to achieve a structure along the lines
outlined, at face value the terms do not appear to be attractive if the Fund’s out-turn is close
to its projection of losses. By its very nature the structure Marsh was contemplating is
designed to deal with catastrophic and unexpected outcomes. The programme's ability to
deal with this is somewhat constrained by the sub-limit of £2m in respect of any one firm.
This sub-limit would apply in two ways, first for the purposes of eroding the Fund’s £60m
retention and second in respect of claims once the aggregate retention has been exhausted.
The sub-limit could be increased, but combined with a significant impact on the amount of
risk which the Fund would be required to retain and a somewhat lesser impact on the actual
premium.

Marsh’s assessment was that the prospect of a viable scheme was poor and currently
difficult to justify economically.




Management Board 14 January 2009 Item 5(iii)                                                  19
                                                                           Annex B



Board and committee template

Equality and Diversity Impact.

Name of the paper/proposal/policy              Compensation Fund Reserve Setting

Author                                         Rob Adams

Date                                           11.11.2008

Board/committee it will be submitted to        SRA Board

Date of submission                             20.11.2008

What are the main aims of the paper/proposal/policy?

To set policy for maintaining the compensation fund reserve which will:
1. Provide adequate financial protection to clients.

Is the paper/proposal/policy likely to negatively or positively affect any
particular groups?
   Yes            No       This is not known (please give details below)

The recommended policy should ensure that clients are adequately protected.

Please indicate if there are any implications on the basis of race, age, gender,
disability, religion or belief and sexual orientation.

None identified

What are the potential equality and diversity implications?

None identified

Has an initial equality impact assessment been carried out?
   Yes (please attach to this form)        No (please provide details below on when
                                       this will be carried out)



If not, when do you intend to carry out an initial equality impact assessment
and bring to the committee?



Board/committee decision and date




Management Board 14 January 2009 Item 5(iii)                                          20
                                                                           Annex C


                        Regulatory Impact Risk Assessment


                  Compensation Fund – Reserve Setting
Recommendation from the paper

1. The Council is asked to accept the recommendation of the SRA Board to maintain the CF
   reserve at a minimum of 1.5 x the average annual value of claims plus the estimated
   value of 3 months’ recharges.

Impact

2. The reserve will be capable of funding grants to clients during the practising year without
   any call for secondary contributions during that year.

       This mitigates the risks of:

          •   compensation payments to clients being delayed or reduced due to lack of
              immediately available funds.

          •   additional financial burden being placed upon firms that might otherwise be
              called upon to make unplanned payments to the regulator during the practising
              year.




Author          Rob Adams

Date            29 December 2008




Management Board 14 January 2009 Item 5(iii)                                                21
DRAFT NOTE TO MANAGEMENT BOARD

Compensation Fund: SRA Proposals


1.     SRA Board makes two proposals concerning the funding required for the
       Compensation Fund.

              That the reserves should be 1½ times the average level of claims paid,
              together with 3 months worth of administrative recharges.
              That administrative recharges from SRA expenditure to the
              Compensation Fund should in future be made only in respect of
              expenditure on administration of the Compensation Fund, and should not
              include the cost of regulatory activity one purpose of which is to protect
              the Fund.

Reserving Policy

2.     The reserving policy seems broadly sound. It appears to strike an appropriate
       balance between the need to minimise the risk of the fund running out of money,
       and the need to ensure that the profession are not required to fund an excessive
       level of reserves. The Management Board is invited to approve that proposal.

Administrative Recharges

3.     The position with the administrative recharges is different.

4.     The approach behind recharges is that a good deal of regulatory activity has as
       one of its purposes the deterrence or early detection of fraud, and hence
       minimising the cost of the Compensation Fund. In recent years, there have
       frequently been requests for additional staffing in the relevant areas of the Law
       Society’s regulatory apparatus specifically in order to ensure that the Society can
       better protect the Compensation Fund. It is thus surprising that the SRA paper
       should contend that the regulatory activity concerned would not be eliminated or
       reduced even if there were no Compensation Fund to protect. Furthermore the
       Legal Services Act actually widens the ability to charge expenditure to the
       Compensation Fund.

5.     The impact of the changes proposed by SRA would be to transfer significant of
       costs from the Compensation Fund to the Practising Certificate fee. Whilst all
       imposts on the profession need to be minimised, the Practising Certificate fee
       level is of even greater political sensitivity than the Compensation Fund levy. It
       should thus not be increased unless there is no proper alternative. It is
       particularly unfortunate that – under the present arrangements – any such
       increase in the practising certificate fee would apply to solicitors in commerce
       and industry and in local government, who make no call on the Compensation
       Fund.

6.     There is, however, obviously a case for examining whether the present
       assessment of what proportion of various activities is reasonably regarded as
       relevant to the Compensation Fund remains appropriate. It is suggested that the
      SRA should be invited to establish a group, including members from TLS, to
      advise on that.

7.    It may also be appropriate to review the approach to Compensation Fund
      charges alongside other changes in the arrangements for charging for regulation
      which SRA expect to propose from the 2010 PC renewal exercise.

Recommendation

6.    Accordingly the Management Board is invited:-

         To advise Council to accept SRA’s recommended approach to the level of
         reserves needed for the Compensation Fund.
         To advise Council not to accept any change to the policy concerning
         administrative recharges to the Compensation Fund at present.
         To review the issue in the context of other changes to the recovering the cost
         of regulation due to come into effect in 2010.
         To invite the SRA to establish a group, including representatives of the Law
         Society, to analyse the appropriateness of the current apportionment of the
         cost of regulatory activities to the Compensation Fund.




14 January 2009/V2
                                                                                           Item 5 (v)

MANAGEMENT BOARD
14 January 2009


Classification – Public

Purpose - For noting


REPORT OF THE CHAIR OF THE BOARD OF THE LEGAL COMPLAINTS SERVICE

The Issues

The regular update to Management Board. The Board is invited to note the report.

Remit

The Board’s terms of reference (1): “To carry out, informed by the Regulatory Affairs Board, the
Council’s role in relation to the regulatory boards”.

Policy Position

Not applicable.

Financial and Resourcing implications

None.

Equality and Diversity implications

None.


Consultation

This report has been prepared directly for the Management Board.



Author            Shamit Saggar, Chair of the Board of the Legal Complaints Service.
Date of report    5 January 2009.
   1. Legal Services Complaints Commissioner (LSCC) - update

       The Legal Services Complaints Commissioner has released a mid-year audit of LCS’s
       performance. The audit, which measures performance against quality targets, showed LCS
       performing well in the first half of the year.

       Specifically, the audit found that LCS exceeded its target to achieve a reasonable outcome
       and service, without significant service failings, in 92.4% of cases. The target performance
       level was 90%.

       Of the 384 files reviewed 82.2% had no failings. Although 10.2% had some failings (with
       limited impact on the customer) these cases also passed the audit.

       The audit also examined performance on coal health. It looked at 274 cases and found 99%
       of them had a reasonable outcome, with information being shared appropriately, the level of
       compensation explained and a suitable amount of compensation achieved.

       There was also praise for the handling of conciliated cases. The audit found miners obtained
       compensation for both the refund of their deduction, and an award for poor service in 92% of
       cases (compared to 27% for the same period in 2007).

       The audit noted concern at the delays in adjudicating the Raleys' matters (although the
       LSCC is aware of the circumstances surrounding this). Overall the audit found that LCS had
       addressed the issues raised previously by the LSCC, resulting in a significant improvement
       in the handling of miner's cases. The results show a sustained level of excellent
       performance.




Management Board 14 January 2009 Item 5(v)                                                            2
   2. November 2008 - summary of performance measures




Management Board 14 January 2009 Item 5(v)              3
       Questions and requests for further information
       If Management Board members have questions relating to this report or wish to have
       additional information about any aspect of the work of the Board of the LCS, I would be
       grateful if they could email me in advance of the meeting, so that I can ensure that I am
       appropriately briefed to answer their questions (either written or orally). Requests should be
       sent to:


       Shamit Saggar - Chair of the Board of the LCS - Shamit.Saggar@legalcomplaints.org.uk
       and copied to
       Claire McCarthy - Executive Assistant - Claire.McCarthy@legalcomplaints.org.uk


       Shamit Saggar
       Chair of the Board of the Legal Complaints Service

       5 January 2009




Management Board 14 January 2009 Item 5(v)                                                          4
MANAGEMENT BOARD
14 January 2009                                                       Item 5 (vi)


Classification – Public

Purpose – For noting

REPORT OF THE LAW SOCIETY CHIEF EXECUTIVE


The Issues

This is the Chief Executive’s regular report to the Management Board.


Remit

The Board’s Terms of Reference in General Regulations 23 (8)’ To hold the Chief
Executive of the Law Society accountable for the efficient discharge of his duties’.


Policy Position

Not applicable.


Financial and Resourcing implications

Where appropriate any specific financial and resourcing implications are noted within
the specific paragraphs.


Equality and Diversity implications

Unless explicitly noted in the report there are none arising from this report.


Consultation

This report has been prepared directly for the Management Board.


Director:              Desmond Hudson
Author:                Desmond Hudson
Date of report:        6 January 2009
1. Legal Services Complaints Commissioner

We still await communication or confirmation of the decision by the Minister as to the
future arrangements for the Legal Services Complaints Commissioner’s office. This
will clearly have potential implications both in terms of the budget and the future
business choices available to LCS and the Society.

Contact with MoJ prior to the Christmas break suggested that communication of a
decision was imminent and we have not been able to secure any further update as to
progress. I am scheduled to speak with a senior official at the Ministry in the next
few days which may enable me to update information to the Board. Progress in
consultation with the Commissioner about alternative uses for the previously
announced fine continues and we expect a satisfactory outcome to be announced
shortly.

2. Pay and Pensions

As members of the Board will be aware from reports made at the last meeting of
Council, last minute negotiations with the trade union produced a position whereby a
joint statement was issued to all staff from management and the union in effect
recommending acceptance. Concessions were made by management in relation to
the existing and continuing arrangements for the privilege day and in relation to
further consultation as to the workings of performance related pay which in my view
were not substantive or significant and certainly did not prevent delivery of the
financial mandate as previously granted by the Board.

The focus of management effort now is in relation to the sound application and
definition of performance management objectives for each and every single member
of staff across SRA and TLS together with the formalised arrangements for how we
will assess and attempt to have consistency and comparability of appraisal ratings
and the award of performance payments between SRA and TLS in time for July
2009.

So far as the arrangements relating to the defined benefit pension scheme are
concerned there are two outstanding critical issues. The formal actuarial valuation as
at 31 December 2007 remains outstanding. It would appear that the trustees are not
minded to accept any of the representations made by the Society in relation to the
technical assumptions upon which the valuation will be made. All indications
continue therefore on the basis that the technical valuation when it emerges will be
higher than the projected costs for buy out.

Whilst we await a formal written response we expect the trustees to confirm a formal
demand for payment of the deficit. We expect that demand for a sum of at least £40
million (the figure they informally identified to us as at July 2007) but it is possible that
the demand will be for a larger sum in line with the deficit identified as at the
December 2007 valuation.

Secondly we believe that the trustees will confirm in writing their preference to
continue future accrual of the scheme based upon the covenant of the Society. It is
likely at that point that the Society will need to take a decision about how it wishes to
proceed. Put simply, we are working on the various options that may be available for
the Board to choose from. This may include the Society filing formal notice in
accordance with the terms of the trust deed that it is to cease future contributions to
the scheme. That would give the trustees the power to call in the payment of the
deficit i.e. to provide for a buy out. Again, in simple terms, if the Society were to take


Management Board 14 January 2009 Item 5(vi)                                                2
this line it needs to be satisfied of at least two items and all would be subject to
consultation with relevant staff. Those two items are, firstly, the availability of funding
from our bankers and, secondly, that a buy out at this time would be sensible. These
matters are likely to come back before the Board by way of formal papers over the
course of the next quarter.

3. The Logica Outsourcing Contract

Members of the Board will be aware that a formal project has been underway for
some time to prepare for the renewal of the current outsourcing arrangements for IT
services with Logica. Our current contract expires in April 2009. Shortly before
Christmas the Society reached agreement with Logica. This will be the subject of a
formal project report at a subsequent meeting but I was anxious to provide members
of the Board with advance notice. The terms of the project have been met
satisfactorily in that we intend to sign a contract renewing the outsourcing
arrangement for the next five years. New contract provisions will apply from January
2009. Over the five year life of the extension we expect to generate a saving over
previous costs of some £2.4 million. We have secured better terms (through the
benchmarking of the proposal with the wider market received) from Logica in part
because of the transfer of certain UK based activities undertaken by Logica to
Logica’s Indian sites.

We have also secured a firmer contractual arrangement with Logica which
particularly focuses upon success criteria being defined by reference to key practical
business measures rather than the previous measures which were essentially
mechanical based broadly speaking on upturn of systems without reference to the
practical availability of systems and recovery of those systems where failures
occurred.

4. PC Renewal November 2008

As at the date of preparing this report the availability of detailed financial analysis has
not progressed from the position shared at Council. I hope to have more up to date
information in time for the meeting of the Board. At this stage we remain confident
that the minimum financial income will be at least £105.5 million in the PC fee year
commencing November 2008. The detailed analysis in relation to the number of
applications and the ratio of full payment to reduced payment applications should
follow shortly.




Management Board 14 January 2009 Item 5(vi)                                              3
MANAGEMENT BOARD
14 January 2009                                                              Item 8


Classification – Public

Purpose – For noting

PROJECT TETRA

The Issues
Project Tetra was launched to remedy the deficiencies in the purchase to pay system
following a report by the Finance team to Audit committee in September 2008 and
recommendations following the BDO Management Letter. Tranche 1 initiatives have
been implemented with some degree of success. The success of the Project
depends on cultural change within the Law Society coupled with sufficient resource
being mobilised on a timely basis.

Remit
The Board’s terms of reference (5) ‘To deal with all matters relating to the finances of
the Society…including (a) financial controls’.

Policy Position
Financial accounting policies and procedures will require updating in the light of this
review.

Financial and Resourcing implications
A sum of £445,000 has been approved by the IT Executive Committee (including
internal costs of £103,000) to upgrade the systems to supportable versions and re
implement basic functionality of our core financial systems.

All departments will be required to contribute to the reconfiguration and
enhancements to the systems.

All users will be required to undergo training and a test of competency.

Equality and Diversity implications
There are no equality and diversity implications.

Consultation
The Management Board is updated on a regular basis.
IT department
Suppliers Proactis and Epicor, together with implementation partners Alphagen.
Internal and external audit.

Author                 Nigel Herbert
Director               Rona Chester
Date of report         05 January 2009
Executive Summary

The purchase to pay system has not been working. The issues were reported to the
Audit Committee in September 2008. As a result Project Tetra was launched to cure
the process weaknesses and upgrade the hardware and software to supported
versions.

In conjunction with the IT department a bottom up review of all systems and
procedures has taken place. Quick win improvements have been made to the
existing systems, some rolled out to all users; some, more fundamental, changes
have been trialled with pilot groups. Further improvements are being deployed prior
to upgrading all of the systems. Feedback from users has been collated and
analysed to identify the most efficient means of completing the project.

The success of the transformation is dependant on a change in the culture and
behaviour of all employees of the Law Society entities. These changes must originate
and be enforced from the Senior Directors who must take responsibility for their
implementation.

There are three key actions all must take for success in the purchase to pay process:
       1)     Each purchase must have a specific purchase order that has been
       communicated to the supplier
       2)     No blanket purchase orders – There should be a one for one match
       for each invoice and a corresponding order
       3)     Goods and services must be approved via the systems on receipt of
       the goods or service.



Background

Procurement is the bedrock of all accounting systems. Without an efficient means of
identifying, authorising and recording expenditure, no accounting system will work
well. Many companies struggle to deploy efficient purchasing and payment
mechanisms. Procurement within the Law Society has been the subject of many
Internal Audit reviews. However their recommendations have never been followed up
satisfactorily.

The Law Society implemented Epicor, its accounting system, in 1999 and Proactis,
its purchasing software, in 2002. The systems were commissioned by the then Group
Finance director using the company Alphagen as a systems implementer. The Law
Society has not upgraded the software for a number of years. Currently it is running
unsupported software on an unsupported database.

Purchases to pay procedures have not evolved to reflect the changing nature of the
Law Society and its working practices.

Project Tetra was launched in Q3 2008, initially to upgrade the existing software to a
supported platform and supported versions. However the scope was widened to re-
implement the entire purchase to pay procedures.




Management Board 14 January 2009 Item 8                                               2
Improvements delivered in tranche 1
A gap analysis of existing procedures and deployment, compared to best practice,
revealed several “quick wins” that could be readily deployed cheaply and yield
significant benefits.
    • Users may now raise “Request for credit notes” – This was previously
        unavailable and allows for more rapid processing of disputed items – All
        users.
    • Creation of specific departments thus moving away from “General”
        departments – This allows more control over authorising by restricting the
        areas users can influence. Also it will permit reporting which will do away with
        the need for manual spreadsheets to be maintained by each department to
        control the visibility of spend - Pilot users only.
    • Restructure of approval levels based on Pools – Wherever possible,
        authorisers are allocated to pools so that an authorisation is not dependant on
        a single authoriser. This will reduce the number of orders that are stuck in the
        system that have not been properly authorised. - Pilot users only
    • Automated authorisation of certain orders up to £200– This reduces the need
        for small value purchases to be independently authorised. As a result,
        “blanket” purchase orders are no longer required. Now they should never be
        deployed. – Pilot users only.
    • Automated G/L coding of purchase items on templates – This reduces the
        requirement to look up spending codes and gives consistency of spend
        analysis. - Pilot users only
    • Partial VAT – built in to specific order templates for Pilot users only. This will
        enable a more accurate VAT return to be made and hopefully save money.
    • Reviewed and changed ‘tolerances’ – This will reduce the trouble shoots,
        which in turn speeds up processing. - All users
    • Changes to troubleshoot messaging – All users
    • Specific training guides (with online help) – All users

Improvements delivered in tranche 2
   • Additional quick wins were also implemented:
   • New Data Warehouse – updated overnight
   • New Management Information reporting and dashboard engine – All users
   • Accruals and one off supplier report – All users

Upgrade
The following actions were completed in preparation of the upgrade to the systems:
   • New “Non Production” infrastructure built and configured.
   • 3 Test environments set up in line with Best practice.
   • Proactis software upgrade completed in the test environment.
   • The “As is” business processes are defined.

Improvements to be delivered in January 2009
   • Discontinue use of 'blanket' orders – a series of communications will be
      issued in January
   • Stand-alone invoicing – Not all purchases require purchase orders, these are
      currently dealt with outside the system. - To be implemented 19th January
   • Stationery Catalogues – This will make purchasing stationery more efficient -
      To be implemented 19th January
   • FRx Upgrade and rollout across Citrix – This will improve the availability and
      quality of reporting. - To be implemented 19th January
   • Additional Training/Guidance notes


Management Board 14 January 2009 Item 8                                               3
Benchmarking of Performance
A health check was run of the processing on Proactis in the three months to 21
November 2008. This was the day prior to the implementation of the tranche one
changes.

The key findings were as follows:

                                Measure        Comments
Orders raised                   1,702
Average authorisation time      3.53 days      The authorisation times were the
                                               longest of any Proactis health
                                               checks. The recommendation is to
                                               review the authorisation rules

Average delivery performance    88 days        Delivery dates are not used and
                                               GRNs are not raised at the
                                               appropriate time
Invoices processed              4,375          2.57 invoices per order. This should
                                               be almost 1. This is caused by
                                               using blanket orders
Trouble shoots                  5,038          2.96 trouble shoots per order. Best
                                               practice would be less than 20% of
                                               orders requiring trouble shoots
Orders > 6 months old           7,736          Old orders should be closed on a
                                               regular basis.


Key lessons learned to date

   1. Tranche 1 has highlighted the poor level of user competency across the
      group:
          o A number of users struggle to handle even the most simple of
               changes – more hand holding required than expected.
          o Most issues are caused by infrequent users of the system
          o Entire P2P process works considerably better where Purchasers work
               regularly on the system - e.g. The IT model.
   2. We need to make small step changes at a time – to much too soon will lead
      to failure.
   3. Departments Heads must be “bought in” to the new processes and system
      changes upfront. They need to sell these changes to their teams.
   4. User requirements need to be gathered from key users across the group.
   5. All processes need to be approved across the group prior to configuring the
      application.
   6. Communications need to be timely and cater for the fact that not everyone
      reads them. A formal communication plan is required.
   7. A User Forum needs to be set up to;
          o Provide input to and approve all requirements and new processes
          o Act as ambassadors for their departments to field questions and
               champion the changes
          o Undertake review and approval of training material
          o Input to the implementation plans for departmental rollout
          o Provide UAT (User Acceptance Testing) resources
          o Floor walk and act as “super users” during the implementation
   8. Creating departments causes issues with work in transit.


Management Board 14 January 2009 Item 8                                           4
   9. Configuration of departments and templates etc. is more labour intensive than
       expected.
   10. No automated method of transferring tested configuration to the Production
       environment- Formal process required.

   However, benefits are already being realised from deployment of the tranche 1
   features.


Proposed approach based on learning and feedback to date

Given the key learnings so far, feedback from Audit and some key stakeholders, an
alternative plan has been proposed at the last Programme Board.

   1. Rollout tranche 1 & 2 to everyone, start reaping benefits this brings early.
   2. Spend time with key stakeholders, heads of department and key users to
      ascertain individual requirements and obtain buy-in to the proposed change
      plan.
   3. Implement the upgrades (and new reports and dashboards) across the group
      including any required new features
   4. Start training from day 1 of implementation.
   5. Rollout additional modules in quick succession after upgrade training




Management Board 14 January 2009 Item 8                                             5
   Nov                Dec                       Jan                   Feb                       Mar             Apr               May              June
                  Tranche 1 Pilot
 Tranche 1 Live                                                Roll out Tranche 1 & 2 across group.
                                    Tranche 2 Pilot            Set up new departments, Auth pools,
                                                               Templates etc.
                      Tranche 2 Live
                                        Feedback, requirements gathering,
                                        stakeholder buy in across the group

                                        Define “to be” P2p process                        Upgrade
                                        (review upgrade features)                         and build new
                                         & define MI requirements                         P2P process

                                                                                                      System
                                                                                                                 UAT
                                                                                                      Testing
                                                                                 Complete Training               Training       Upgrade Go Live
                                                                                 material                        Pilot          May B/H weekend




                                                                                            New Modules           New Modules build   New Modules rollout
                                                                                            requirements defn     and test




Management Board 14 January 2009 Item 8                                                                                                                     6
Benefits of the proposed approach
   • Departments will be set up as part of Tranche 1 rollout – not part of upgrade.
       This will accelerate the benefits of the departments and minimise the risks
       associated with the upgrade
   • Benefits of Tranche 1 & 2 will be rolled out across the group ahead of the
       upgrade – More people will have greater benefits earlier
   • Training starts from day 1 of go live and not after Pilot – Training has been
       identified as the chief requirement.
   • Training does not have to be carried out by department – this gives more
       flexibility in creating the training plan
   • P2P process training should be completed quicker.
   • This solution takes incorporates the key learnings and feedback
   • Slowing the roll-out provides time to obtain buy in from “Heads of” and key
       stakeholders.
   • We now have more time to fully assess all 280+ changes in latest version and
       agree how they might be implemented
   • There will be less change for users to cope with from day 1.
   • Allows time to fully define exactly how the reports and dashboards will be
       used.
   • Allows time for training team to assess how to approach expenses rollout.
   • More chance of group wide buy in and user adoption.

No decision will be made by the Programme Board on the alternative proposal until a
full impact analysis on time, resources and cost has been made. A working meeting
of the Programme Board has been set up for 7 January to finalise the new plan.




Management Board 14 January 2009 Item 8                                           7
Delegated Financial and Non-Financial Authorities




Contents
 Contents .............................................................................................................................. 1
 Purpose ............................................................................................................................... 2
 Background ......................................................................................................................... 2
 Compliance ......................................................................................................................... 2
 Consequences of non compliance ...................................................................................... 3
 Financial Delegated Authority ............................................................................................. 3
 Delegated Authorities Specifically Excluded ....................................................................... 3
 Levels of Financial Delegated Authority .............................................................................. 3
 Approval of Financial Authority............................................................................................ 4
 Financial Delegated Authority Framework .......................................................................... 4
 Commitment and Approval.................................................................................................. 4
 Emergency Expenditure ...................................................................................................... 5
 Approved Budget................................................................................................................. 5
 Purchase Splitting ............................................................................................................... 5
 Financial Delegated Authority Schedules............................................................................ 5
 Expenses............................................................................................................................. 5
 Overtime.............................................................................................................................. 6
 Sales Credit Notes .............................................................................................................. 6
 Bad Debts............................................................................................................................ 6
 Non-financial Delegated Authorities .................................................................................... 6
 Payments from TLS, TLS Charity, Compensation Fund & Statutory Trust Accounts.......... 7
 Payments from Law Society Publications Account ............................................................. 7




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                                                     15/01/2009
Section XX
Delegated Authorities Framework
Operating Guidance


Purpose
    1. To provide a framework of financial delegated authority within which all entities of
       the Society can effectively manage and safeguard financial resources.
    2. The establishment of a robust framework of delegated authority.
    3. Ensure consistency of practices within the Law Society and its subsidiaries, and
       to prevent situations where mishandling of funds can arise.
    4. This document determines the policy by which the authority and discretion to
       commit the Law Society’s funds, and the subsequent payment for goods and
       services purchased in the course of operations is to be applied.

Background
    5. The Society (the Law Society, SRA and LCS), an organisation incorporated by
       Royal Charter, is governed by the Council of the Society; a group elected by the
       membership.
    6. The Council has delegated certain activities to the SRA and the LCS. They
       together with the Law Society (TLS) are empowered to carry out their roles as
       delegated to them on behalf of the Council in accordance with the general
       regulations and by-laws of the Society.
    7. The effectiveness of the control environment is monitored by the Audit Committee
       of Council.

Compliance
    8. The Chief Executive of the Society as the Society’s Accounting Officer and Group
       Finance Director are responsible for the adequacy of financial controls to
       safeguard the financial resources of the Society.
    9. Only permanent staff of TLS may have delegated financial authority.
    10. Full compliance with this policy is required by all staff. Each employee is
        responsible for ensuring their own compliance with the financial authorities set
        out in this framework.
    11. All deviations from compliance will be reported by the Group Finance Director to
        the Society’s Accounting Officer and the relevant Chief Executive Officer as soon
        as is practicable.
    12. Periodic reporting on compliance will be delivered by the Group Finance Director
        to the Audit Committee.
    13. It is the responsibility of each individual permanent member of the Society’s staff
        to ensure their own compliance with the financial authorities and standing
        financial policies when exercising any delegation made to them.




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Operating Guidance

Consequences of non compliance
     14. Disciplinary action may be taken against individuals who exceed their
         authorisation levels or fail to adhere to the policies as exist from time to time.

Financial Delegated Authority
     15. Delegated authorities are set out in the General Regulations of the Law Society;
         requiring each entity to:
        -       set strategic objectives for their organisation
        -       monitor performance against those objectives
        -       prepare operation plans and budgets for presentation to the Management
                Board of the Law Society
        -       ensure value for money is obtained in all matters for which they are
                responsible
        -       monitor income and expenditure against budgets.
     16. The individual Boards may delegate their authority in relation to financial
         management to the Chief Executive Officers, specifically citing the operational
         objectives and requirements.
     17. As the operating authorities are delegated within the organisation, accountability
         remains with the individual granting the delegation.

Delegated Authorities Specifically Excluded
     18. Delegated authorities specifically excluded from the scope of this policy are
         powers to:
        -       Open bank accounts, use financial instruments or enter into financial
                arrangement, establish a debt arrangement, set funding requirements,
                hedge foreign currency receipts or expenses. Refer to the Treasury
                Policy.
        -       Make employment-related decisions.
        -       Establish or modify Law Society fees

Levels of Financial Delegated Authority
     19. The financial delegated authority framework has been established, with authority
         being delegated to levels of staff:
        -       Level 1     Council of the Law Society/SRA/LCS
        -       Level 2     The Law Society Management Board
        -       Level 3     Relevant CEO and or Group Finance Director
        -       Level 4     Directorate Heads
        -       Level 5     Cost centre managers/Supervisory staff
        -       Level 6     Purchase order raisers
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Operating Guidance

          -       Level 7    All staff with nil delegated financial authority

Approval of Financial Authority
       20. Each CEO’s financial delegated authority shall be approved by the Council.
       21. The making of a delegated authority to a permanent member of staff in
           accordance with this authority shall be approved in writing in advance by the
           relevant CEO.

Financial Delegated Authority Framework
Staff Level                                      Financial Delegated Authority

Level 1                                          Over £1 million

Level 2                                          Up to £1 million

Level 3                                          Up to £350,000

Level 4                                          Up to £100,000

Level 5                                          Up to £25,000

Level 6                                          Up to £200

Level 7                                          Nil


Commitment and Approval
       22. The delegated financial authority framework empowers individuals in accordance
           with the terms of this authority to:
          -       Commit the Law Society to expenditure in return for goods or services.
          -       Authorise payments to individuals or bodies.
          -       Authorise the payment of goods and services received.
       23. The financial delegated authority for each staff level represents the maximum
           value of individual operational expenditure that may be committed to, and or
           approved by a staff-member belonging to that staff level.
       24. All transaction limits exclude VAT.




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Section XX
Delegated Authorities Framework
Operating Guidance



Emergency Expenditure
     25. In an emergency, where failure to pay timeously may result in reputational
         damage to the Society, expenditure in excess of £350,000may be authorised by
         the CEO of the Law Society. All such expenditure must be ratified at the next Law
         Society Council meeting.

Approved Budget
     26. The approved budget for a cost centre is the primary authority over operational
         expenditure. Expenditure may only be committed where there is sufficient budget
         to cover the purchase, regardless of the financial delegated authority.
     27. Where there is insufficient approved budget to cover operational expenditure,
         approval for the resulting variance to the approved budget must be obtained from
         the Group Finance Director prior to the commitment of the Law Society’s funds.

Purchase Splitting
     28. Purchase transactions must not be split into smaller amounts, or across time
         periods, in an attempt to frustrate or exceed the financial delegated authority of a
         staff member.
     29. Purchases on debit cards should not be split to circumvent the maximum
         transaction amount permitted.

Financial Delegated Authority Schedules
     30. Financial delegated authority is an individual empowerment to commit the Society
         to a financial transaction for goods and/or services. The exercise of this power is
         through the authorisation of a purchase order, signing of a contract, authorisation
         of an expense claim or of a manual payment instruction.
     31. Financial delegated authority may also empower an individual, usually a member
         of the senior finance team, to sign cheques or conduct the payment processes
         via electronic means.
     32. Financial delegations are managed by the Finance team who shall maintain
         sufficient records to enable proper financial controls and checks to be carried out.
         It uses the Proactis purchasing system, supported by the original hard copy
         delegated authority cards bearing two specimen signatures.
     33. Approval may be given by email.

Expenses
     34. A staff member cannot approve their own request for reimbursement of personal
         expenditure
     35. Reimbursement of expenditure is limited to expenditure that was related wholly to
         Law Society operations

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Operating Guidance

     36. All expenses claims must be authorised by a more senior line manager
     37. All expense claims over £3,000 must be approved by the Group Finance Director,
         or relevant CEO.

Overtime
     38. All overtime must be approved in writing before being undertaken by the relevant
         cost centre manager.
     39. Only individuals who qualify for overtime as per HR policy may be paid for
         overtime authorised, unless specifically authorised by the relevant Director.

Sales Credit Notes
     40. All credit notes issued to customers must be authorised as follows:
        -       Up to £5,000 (Excluding VAT)       Sales Unit Manager and Customer
                                                   Accounting Manager
        -       Over £5,000                        Head of Financial Accounting

Bad Debts
     41. Balances on the Accounts Receivable ledger should be reviewed quarterly to
         determine the specific debt to be recorded as a bad debt provision.
     42. All bad debt write offs must be authorised in advance by the Head of Financial
         Accounting,

Non-financial Delegated Authorities
     43. All business decisions within the Society have financial consequences. However
         there are many instances where decisions relate to a non-financial aspect of the
         business, for example:
        -       Adjudication on complaint matters or Compensation Fund claims
        -       Waivers and other special cases
        -       Recruitment and inclusion in the payroll
     44. The delegated authority may be identified in a relevant policy. It usually relates to
         a specific post e.g. Adjudicator, rather than a named individual. Individuals
         occupying those designated posts should receive written delegation detailing the
         limits of their delegated powers.
     45. As part of any management check by staff receiving authorised instructions they
         should verify the following:
        -       the individual exists and is a staff member (via Insight, the Society’s
                intranet)
        -       they hold a designated post e.g. as an Adjudicator, and are empowered to
                make the decision (via Insight, the Society’s intranet)
        -       the authorising signature compares to a control sample signature

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Delegated Authorities Framework
Operating Guidance

         46. When staff leave or change roles their delegations must be rescinded and new
             delegations issued to the replacement staff.

Payments from TLS, TLS Charity, Compensation Fund & Statutory
Trust Accounts
            -       £75,000:          Any one signatory from the table below
            -      Over £75,000:     Two signatories from the table below
            -      one must be the Group Finance Director or a Finance Management Team
                   Member (FMT)

                          TITLE

Group Finance Director

Interim Head of Financing Accounting and Reporting
Interim Head of Financial Planning and Analysis

Senior Finance Officer: Cash Accounting & Administration

Controller (SRA)

Group financial accounting and taxation Manager

Financial and Taxation Accountant

Customer Administration Manager (accounting)

Finance Manager (LCS)

Title to be confirmed

Senior Finance Officer: Payroll

Senior Management Accountant


Payments from Law Society Publications Account
Customer Administration Manager

Prolog




                                      mwwspa                             Page 7 of 7
                                     15/01/2009
MANAGEMENT BOARD                                                                   Item 17
14 January 2009

Classification – Public

Purpose – For noting

PROJECT MANAGEMENT REPORTING
The Issues

This paper details the agreement between the Group CEO and Group CIO to consolidate
status reporting of all advised project activity across the Society within the Group IT
monthly Project Overview Report.

The Board is invited to note the extension of the Group IT monthly reporting to
encompass all project activity across the Society.

Remit

The Board’s Terms of Reference (23.5): ‘to deal with all matters relating to the
finances… and the effective management of resources including (a) financial
control; (c) capital expenditure; and (d) investment management.’

Policy Position

There is no existing policy in this area.

Financial and Resourcing implications

The resource needed to extend the scope of the monthly Project Overview Report will be
accommodated within existing headcount in Group IT’s Programme Management Office.
This resource is accounted for within Group IT’s approved 2009 budget.

Equality and Diversity implications

None

Consultation

The IT Executive Committee have approved this extension of project reporting. This will
enable more effective management of project activity and related expenditure across the
Society during 2009.


Director and Author: Steve Jeffree, Chief Information Officer
Date of report: 18 December 2008
Background

1. During 2008, Group IT has developed a comprehensive monthly report for the IT
   Executive Committee. This report is known as the Project Overview Report and
   details all project activity managed by Group IT. The report details each project’s
   status with forecast and actual expenditure.

2. There is known to be other significant project activity, ongoing across the Society,
   which is managed from within different business units. Currently no single,
   consolidated report exists to provide the Chief Executives and other senior
   management with visibility of all project activity and related expenditure.

3. The IT Executive Committee have agreed that it is appropriate to pilot the extension of
   the monthly Project Overview Report to encompass all such project activity. The initial
   pilot period is proposed as 6 months to start from 1 January 2009.

Benefits of a Single Society-Wide Project Overview Report

4. The IT Executive Committee, and the senior management teams within each
   business organisation, will have access to a central, consolidated overview of all
   project and change-related activity within their own organisations and also across the
   Society as a whole. The relevant groups are:
   • For TLS and Shared Services the Executive Management Board
   • For SRA the Senior Management Team
   • For LCS the Senior Management Team

5. By virtue of this central, single overview the IT Executive will be able to:
   • prioritise all projects more effectively for the benefit of the Society as a whole
   • align all project activity and expenditure to agreed business strategy
   • re-prioritise scarce people and financial resource to the projects on the strength of
      approved business cases
   • ensure that where internal resource is not available to meet approved project
      timescales that either centrally managed decisions are made on the recruitment of
      costly external resource or projects are re-timed to align with later availability of
      key internal resource.


Risks of a Single Society-Wide Project Overview Report

6. This pilot depends on all parts of the Society being willing to provide monthly updates
   to Group IT’s Programme Management Office (PMO) on the dates required for
   preparation of the Project Overview Report. Some areas may be unwilling to provide
   the necessary information or may not deem their business change activity to be
   pertinent to the IT Executive Committee’s central management of change.

Financial and Resourcing Implications

7. The headcount within Group IT’s PMO is restricted and the pilot is intended to be run
   at no incremental cost to Group IT’s approved 2009 budget. It is believed that all
   project activity is not currently identified in each area’s business plan for 2009.
   Without the various business areas providing the information to Group IT’s PMO it will
   not be possible to ensure accurate identification of all project activity across the
   Society.




Management Board 14 January 2009                                                          2
Project Overview
December 2008
IT Executive Approved Projects
Project    Project Name        Brief Project Description           Sponsor     RAG        Total        Total               Benefits
Ref                                                                           Status    Approved     Committed
                                                                                         External    and Actual
                                                                                          Spend        Spend

C81CPX PABX s/w            The software that runs all the core    S Spicer   *Amber    £491,114     £33,913       All PABXs will be running
       Upgrade             PABX telephone switches for the                                                        supported software with the
                           Law Society is out of support with                                                     final upgrade scheduled by
                           the vendors.                                                                           the end of Q1 '09. Upon the
                                                                                                                  completion of the upgrade
                           * Project Status Amber. Project                                                        there are opportunity cost
                           running behind schedule due to                                                         savings that can be
                           delay in replacing project manager.                                                    investigated such as for
                           D Whiston appointed PM w/c                                                             example using VOIP to
                           24/11/08                                                                               replace the telephone
                                                                                                                  circuits.
C81CAD Active Directory The business requires rapid and         S Spicer     *Amber    £76,500       £37,481      Total of £21,603 saving p/a
       Improvement      accurate creation and amendment of                             £66,500                    from ½ FTE and support
                        user accounts, this will improve                               (Approved                  costs.
                        organisational productivity, especially                        budget minus
                        in areas with a high staff turn-over by                        AD
                        enabling new staff to be productive in                         Management
                        a reduced time.                                                Tool costing)

                           *Project status Amber. Project
                           running behind schedule due to
                           awaiting decision on the AD
                           management tool, this has now been
                           removed from the scope of the
                           project with agreement from the
                           Project Board. Closure Report has
                           been circulated to the Project Board
                           for sign off.
Project     Project Name      Brief Project Description            Sponsor      RAG Status       Total       Total               Benefits
Ref                                                                                           Approved     Committed
                                                                                               External    and Actual
                                                                                                Spend        Spend

C81TSO Project Wombat -      (1) To ensure the optimum IT        S Jeffree -    Green        £120,000     £102,165      Renewal of contract with
       Preparation Stage     service delivery model and          reporting to                                           expected savings of 10% on
                             contracted terms are created        Steering                                               the current Logica contract.
                             for ongoing support to TLS          Committee
                             Group at acceptable cost,
                             flexibility and service levels in
          Project Wombat -   line with the new IT Strategy.                                  £137,835     £137,835
          Benchmarking       (2) To ensure Logica commit
          Stage              to acceptable timescales




          Project Wombat -                                                                   £150,000     £150,000
          Contract Stage
 Project   Project Name        Brief Project Description     Sponsor    RAG Status      Total         Total              Benefits
  Ref                                                                                 Approved     Committed
                                                                                       External    and Actual
                                                                                       Budget        Spend

C81CEP Tetra Programme In line with the Group IT strategy,  R Chester   Green        £342,000     £24,120       Potential benefits of the
                       agreed by management board, all                                                          transformation program have
                       applications will be managed                                                             been identified over the 5
                       centrally by Group IT. Currently the                                                     year lifetime of the software
                       Finance applications Epicor and                                                          as £960,000. Other benefits
                       Proactis and the relationship with                                                       can be found from
                       the 3rd party reseller of these                                                          redeployment and improved
                       products Alphagen, is managed by                                                         employee morale.
                       Finance.
                       The transformation element of the
                       TETRA programme seeks to define
                       best practice and “fit for purpose”
                       business processes in line with the
                       organisation’s needs and to
                       transform both Epicor and Proactis
                       in line with the new processes

C81CWB Google Search       Google search engine as an       M Fellowes Green         £322,687     £58,357       £232,991 savings through
       Engine              enterprise wide replacement of                                                       reduced licence fee, hosting
                           Autonomy.                                                                            and support costs.
Project     Project Name        Brief Project Description         Sponsor         RAG        Total       Total         Benefits
Ref.                                                                             Status    Approved Committed
                                                                                            External  and Actual
                                                                                            Budget      Spend
C81SPD SRA IT Programme     The SRA Programme Definition           A Townsend   Green     £780,100   £399,100    Provide clarity on
       Definition           phase will provide the necessary                                                     how the SRA will
                            detailed planning and design of all                                                  improve as a result
                            aspects of the SRA IT Programme                                                      of new services and
                            which will help to clarify uncertainty                                               capabilities.
                            and reduce risk.


C81SWS Group Web Strategy A new Web Strategy Solution is     A Townsend         Green     £659,000   £61,900      Benefits include:
                          needed to replace the existing web                                                      + Faster website
                          platforms with a single solution.                                                       development
                                                                                                                  + User authentication
                                                                                                                  to increase security
                                                                                                                  + New channels for
                                                                                                                  client interaction to
                                                                                                                  improve quality of
                                                                                                                  service
                                                                                                                  + Reduced Costs by
                                                                                                                  leveraging internet
                                                                                                                  self service
                                                                                                                  + Meet regulatory
                                                                                                                  requirements
Project    Project Name             Brief Project Description               Sponsor     RAG Status      Total         Total             Benefits
Ref                                                                                                   Approved     Committed
                                                                                                       External    and Actual
                                                                                                       Budget        Spend

C81CFB Flexible Benefits - It has been proposed that flexible benefits L Jones            Green      £116,000     £95,775       Allow employees to
       Stage 1             be rolled out organisation wide in January                                                           tailor their mix of pay
                           2009 as part of the overall programme                                                                and benefits from the
                           ‘building a sustainable future together’. In                                                         Society to meet their
                           order for this to be achieved a robust                                                               personal
                           flexible benefits management system is                                                               circumstances.
                           required to enable to administration of
                           such a scheme.
       Flexible Benefits -
       Stage 2
                           Stage 2 to implement Single Sign On and
                           Total Reward Statement - To commence
                           in January

C81CAE AssystNet &          Implement application improvements to         E Tomlinson   Green        £48,100      £22,500       £15,000 p/a through the
       **Event Bridge       the IT Service Desk product suite to                                     £23,100                    saving of 1/2 FTE (The
       Upgrade              improve internal and external usability.                                 (Approved                  removal of the current
                                                                                                     budget for                 full time Service Desk
                            **Project Update. Agreed by the Project                                  AssystNet)                 Analyst vacancy) In
                            Board that Event Bridge be removed from                                                             addition there will be an
                            the project scope due to drastically                                                                increase to service
                            escalated costs for implementation.                                                                 efficiency within the IT
                            Benefits to be redefined for AssystNET in                                                           Service Desk.
                            closure document. Event Bridge to be
                            undertaken as a separate project at a later
                            date.
Projects with Approved IFRs
Project Project Name                  Brief Project Description                   Sponsor      RAG        Total       Total
Ref                                                                                           Status    Approved    Committed
                                                                                                         Budget     and Actual
                                                                                                                      Spend
C81DPI SDT             An upgrade to improve everyday system access and          L Alldred   *Red      £17,500     £21,974
       Performance     OPSIS performance.
       Improvement
                       *Project Status Red. Project delayed due to ongoing
                       availability issues with OPSIS support. OPSIS Go Live
C81CAB Archibus        Archibus is a database system that allows you to file and B Randall   Green     £18,660     £17,457
       Upgrade         catalogue drawings made with AutoCAD. The upgrade is
                       needed to fix one or two bugs in the system, to introduce
                       some new features and to bring us to a supported level.

C81SEB Entity Based    Technical changes to Regis which support The Legal        A Hunter    Green     £17,112     £17,112
       Regulation      Services Act 2007
                       • Changes to the existing RegIS and Cites system to
                       support the March and July 2009 implementations of Entity
                       Based Regulation.
                       • The passporting of existing partnerships and sole
                       practitioners into recognised bodies and recognised sole
                       practitioners.
                       • System change training.

C81TRE Rendezvous      The software provider (NFS Hospitality) of the Law Society P Garner   Green     £14,660     £14,404
                       current booking system Rendezvous (RDZ), is upgrading
                       all their customers to version 3.4. NFS will be phasing out
                       the support of versions before 3.4 before the end of 2008.
Project     Project Name                        Brief Project Description                          Sponsor      RAG       Total         Total
Ref                                                                                                            Status   Approved     Committed
                                                                                                                         External    and Actual
                                                                                                                         Budget        Spend

C82CMW LANDesk Gateway Enabling LANDesk to deploy new and updated software along with C Quinney               Green     £9,200      £9,200
       (Mobile Working the ability to automatically collect and store hardware / software
       Stage 2)        inventory data for all home and mobile workers PCs.


C81TOL    OLIB Upgrade from Upgrade of Library Management System (LMS) software from         C Pease          Green     £6,161      £11,637
          7.5 to 7.7        OLIB 7.5 to OLIB7.7 and OS from Oracle 9i to Oracle 10(essential
                            for OLIB7.7)

C81TOE On Line Events        Online events display, booking and administration for               M Fellowes   Green     £5,550      £0
                             lawsociety.org.uk and all SIG (Specialised Interest Groups)
                             services.
C81SRW Remote Working        To allow workers to connect to the solution flexibly from any       C Quinney    Green     £1,800      £0
       /3G Access            location that offers 3G coverage.

C81SCR e-CRB (detailed       To provide the functionality for the SRA to participate in the e-CRB A Hunter    Green     £0          £0
       design phase)         pilot, this includes:
                               • Provision of a web interface which allows the capture and
                             validation of the data required to complete a CRB check
                             application in a user friendly manner
                              • Provision of a secure FTP method which facilitates secure
                             electronic communication with the CRB.
Business Cases & IFRs Awaiting
           Approval
    Project Name                            Brief Project Description                                Sponsor    Total Funding
                                                                                                                   Sought
Implementation of new   Project to Implement New Logica Outsourcing Contract. Business S Jeffree -             £340,000
Logica Outsourcing      Case to be submitted to IT Exec for approval 09/12/08.                  reporting to
Contract -                                                                                      Steering
Business Case                                                                                   Committee
Web requirements to     This IFR is for support from IT with the initial stages of a project to M Fellowes     £111,500
support agreed          address web requirements to support the Society’s membership
membership model        model and special interest groups (SIGs). Business case to be
and SIGs. -             submitted to IT Exec for approval on 09/12/08
Business Case
Replacement of ACT &    The Gazette’s existing computer systems and associated             J Tarry             £70,800
MSG with Integrated     business practices were developed over 10 years ago and are out
System -                of date with current technology and publishing best practices. The
Business Case           MSG (advertising booking system) and the separate ACT (contact
                        management system) need to be replaced with a single integrated
                        solution. Business case to be submitted to IT Exec for approval on
                        09/12/08
   Project Name                        Brief Project Description                       Sponsor     Total Funding
                                                                                                      Sought
Upgrade to          Compuset software is used to create the forms (particularly      J Fradgley   £TBC
Compuset & Planet   during PC renewal) and Planet Press software converts the forms
Press Software      produced by the Compuset software to a format that can be
Online Events -     printed by the Society’s Canon printers. Business Case
Business Case       devlopment in progress. Submission for IT Exec approval
                    16/12/08
Sections Database - There are currently 5 Sections or Special Interest Groups (SIGs) M Auz        £TBC
Business Case       managed by Membership Services which generates income of
                    around £1.5m p.a. for the Law Society. Business Case
                    devlopment in progress. Planned submission for IT Exec approval
                    in January 09
Case Management - The Legal Services Department are requesting that their existing P Crowhurst    £TBC
Business Case       Access database be replaced by an off the shelf Case
                    Management system. Business Case devlopment in progress.
                    Planned submission for IT Exec approval in January 09
OLC Transition      Transition of LCS to OLC.                                      R Wallman      £TBC
                    No Business Case or IFR process at present
   Project Name                      Brief Project Description                           Sponsor    Total Funding
                                                                                                       Sought
Visiplan - IFR     The Visiplan system controls the turnstiles at Chancery Lane and R Spencer      £6,000
                   prints guest security badges. The system is currently unstable
                   and difficult to support. To be Approved at ITLT 11/12/08
Charm Get Well -   The Charm system takes information from the tills in the shop at J Graves       £6,000
IFR                Chancery Lane. It then delivers this information into a database
                   hosted on server LONAPPS03. This data is then used by a PC to
                   generate management reports. Data is also delivered to the
                   Finance system. To be Approved at ITLT 11/12/08
Active Directory   IFR to be developed. To be approved at ITLT 11/12/08             S Jeffree      £10,000
Redesign - IFR
                                          AUDIT COMMITTEE

                         Minutes of the meeting on 25 November 2008
                 at 10:30, in the Chancery Room, 113 Chancery lane, London
                                                  Part 1
Present:            Stephen Brooker, Chair

                    Stuart Collins
                    Grenville Page (items 25, 26, 29-31)
                    Murray Ross
                    Bob Spedding (items 25-31)
                    John Stoker
                    Stanley Williams

By invitation:      Philip Hamer, Chair, Management Board

In attendance:      Desmond Hudson, Chief Executive, The Law Society (items 25 and 26)
                    Rona Chester, Group Finance Director (items 25, 26, 29-31)
                    Barry Christie, Committee Secretary
                    Steve Towsey, Head of Internal Audit


25       APOLOGIES

         Apologies were received from David Wilson.

26       CHAIR’S OPENING REMARKS

         The Chair welcomed two new members: Council member Stanley
         Williams and John Stoker, SRA Board member, and also the Chair of
         the Management Board.

         The Chair had invited Philip Hamer to attend all 2009 Audit Committee
         meetings.

27       MINUTES OF MEETING ON 23 SEPTEMBER 2008

         The Committee approved the part 1 minutes of the meeting on
         26 June 2008.

28       MATTERS ARISING

28.1     Timetable for preparation of 2008 accounts

         At the previous meeting the Chair had sought clarification on the
         timetable for preparation of the Society’s 2008 accounts.

         The Committee noted the schedule prepared by the Group Finance
         Director, in consultation with the Chair of the Management Board:


Part 1 Audit Committee Minutes 25 November 2008                                          5
         Key dates in 2009 were:

         •   19 March: First draft accounts to the Committee
         •   15 April: Second draft accounts to Management Board
         •   21 April: Committee to examine second draft accounts
         •   20 May: Final accounts to be approved at Management Board
         •   10 June: Accounts to be signed at Council.

         The Audit Committee meeting on 21 April would start at 09:30 and be
         devoted to the main Law Society accounts, including comments from
         15 April Management Board meeting.

         Members of the Committee would attend the Management Board
         meeting on 20 May to discuss the final accounts and associated          Philip Hamer
         documents; this should be taken as first item of business on the        Flick Heron
         agenda at 09:30.

28.2     Audit Committee quorum

         The Head of Constitutional Affairs had advised that the quorum should
         remain unchanged following recent changes in the Audit Committee’s
         composition, i.e. that three should be present including at least one
         Council member or the Chair.

         In response, the Committee felt that the conduct of business should
         not be dependent on the Chair or the only Council member being
         present and requested that the matter be referred to the Management     Barry Christie
         Board asking that the quorum be changed to any three members.           Flick Heron


         The Committee would also discuss the nomination of a Vice-Chair at
         its next meeting.

28.3     Schedule of Action

         The Committee noted the Part 1 Schedule of Action.

         The Head of Constitutional Affairs had appointed a consultant to
         review Law Society bursary/prize trusts to consolidate them, reduce
         audit and management costs and facilitate compliance with charity
         and other requirements.

         A progress report on work being undertaken to review and improve
         the Society’s purchase to pay (procurement) systems would be
                                                                                 Nigel Herbert
         presented to the next meeting.

29       SRA - RISK MANAGEMENT UPDATE
         The Committee noted the progress report on risk management work
         undertaken since the last meeting prepared by Jim McCullagh, the
         SRA's new Risk Officer.

         Both the Law Society and SRA had commissioned DNV as their risk
         management consultants.




Part 1 Audit Committee Minutes 25 November 2008                                                   6
         John Stoker confirmed that the SRA Board regularly reviewed risk and
         that a programme of training sessions for business unit managers had
         been rolled out across the organisation. Research had also been
         undertaken on the use of electronic risk registers.

         The Committee requested that the draft risk registers created for each      Antony Townsend
         directorate across the SRA be updated and presented to the next             Jim McCullagh
         meeting.

30       INTERNAL AUDIT UNIT PROGRESS REPORT
         Steve Towsey presented a progress report on projects within the
         2008-09 Audit Plan.

         The Committee noted:

              1. the work undertaken so far by the Internal Audit on the
                 2008-09 Plan;

              2. the improvement in resourcing of the Internal Audit Unit since
                 the return of the Internal Auditor from secondment;

              3. the monitoring report (13.11.08) showing actions overdue for
                 implementation (Appendix 5);

              4. the planned introduction of new arrangements for IT security
                 incident investigation, i.e. this function would be covered by
                 the IT Help Desk and supporting procedures: there would be
                 no re-establishment of an Information Security Officer post;

              5. the Internal Audit Unit Business Plan and Budget for 2009
                 (Appendix 6).

         Since the previous meeting the Head of Internal Audit had also
         undertaken the Management Board’s review of the Committee - see
         minute 18.

         The Committee agreed:

             1. that the Head of Internal Audit gather further information from
                the project manager before committing resources to undertake
                quality assurance work on the Matrix Project, which was being        Steve Towsey
                re-launched;

             2. that although not a high priority, work should commence in
                2009 to develop an anti-fraud policy for staff within the Society.   Steve Towsey

31       MANAGEMENT BOARD REVIEW OF AUDIT COMMITTEE
         Steve Towsey outlined the recommendations of the Audit Committee
         review report undertaken at the request of Management Board.

         The objective of the review was to examine the effectiveness of the
         Audit Committee with reference to the Combined Code on Corporate            Mark Paulson
         Governance and the related Smith Guidance, published in October             Steve Towsey
         2005.


Part 1 Audit Committee Minutes 25 November 2008                                                     7
         The Chair had made some preliminary comments on the report
         and highlighted the need for improved communication between the
         Management Board and Audit Committee.

         The current eight member size of the Committee was considered
         ‘about right’ and could always be reviewed when vacancies arose.
         As a ‘Model B’ type Audit Committee, members would always need to
         have access, for oversight purposes, to a range of minutes, reports
         and other documents across the Law Society Group.

         Steve Towsey would continue to report back on the work of both the
         SRA Scrutiny Committee and the LCS Audit & Risk Committee.

         Murray Ross felt that the Committee should convene four times a year
         with a further meeting reserved to consider the Society’s accounts.

         The Chair stated that the Management Board would be responsible for
         reviewing members’ remuneration.

         In response to the report’s recommendations (section four) the
         Committee agreed:

             1. that the Committee’s terms of reference should be revised to
                include the auditor objectivity and non-audit services points       Mark Paulson
                                                                                    Steve Towsey
                within the Smith Guidance;

             2. that specific areas of work/responsibilities should continue to
                be shared across the Committee and not delegated to
                individual members;

             3. that the Committee should work towards reducing the
                frequency and length of meetings, whilst recognising that
                urgent matters requiring attention could arise;                     Stephen Brooker


             4. that staff should prepare a schedule of discussion topics for the Barry Christie
                Committee early in 2009;

             5. that a framework and timetable for the Audit Committee’s 2008
                                                                                    Barry Christie
                Annual Report be presented to the next meeting;

             6. that the Committee’s Annual Report would be sent to the SRA
                and LCS Boards, with an offer to meet them to discuss the
                content.

         The Chair would report back to the Committee on his forthcoming
         meeting with the LCS Board Chair and CEO.                                  Stephen Brooker


32       COUNCIL AND MANAGEMENT BOARD MINUTES

         The Committee noted:

         •   Part 1 minutes of the Council meetings held on 18 June,
             16/17 July and 8 October 2008;




Part 1 Audit Committee Minutes 25 November 2008                                                      8
         •   Part 1 minutes of the Management Board held on 2 July,
             8 September and 24 September 2008.

         The Committee’s observations on the Management Board’s work with
         the SRA can be found in Part 2 minute 31.

33       LEGAL COMPLAINTS SERVICE MINUTES

         The Committee noted:

         •   Public minutes of the LCS Board meetings held on 4 June and
             17 July and 10 September 2008;

         •   Minutes of the LCS Audit & Risk Committee held on 18 April 2008.

         The next LCS Audit & Risk Committee was scheduled for
         12 December and would consider the minutes of its 25 September
         meeting.

34       SOLICITORS REGULATION AUTHORITY MINUTES

         The Committee noted:

         •   Public minutes of the SRA Board meetings held on 15 May,
             26 June, 24 July, 4 September and 16 October 2008;

         •   Public minutes of the SRA Scrutiny Committee held on 25 June
             2008.

         The minutes of the last SRA Scrutiny Committee (01.09.08) were not
         available.

35       ANY OTHER BUSINESS

35.1     Training for Audit Committee members

         The Committee noted the PricewaterhouseCoopers Non-Executive
         Director training programme for Summer/Autumn 2008.

         The Chairman invited members to register for any of the remaining
         sessions and report back to the content and relevance to the work of   Audit Committee
         the Committee.

         Rona Chester would contact PricewaterhouseCoopers (who were
         approved by the Council on 8 October as the Society’s external
         auditors for the period 2009-2011) to see if they could provide some
         bespoke audit/governance training for members of the Committee         Rona Chester
         and Management Board.


35.2     Meeting dates

         The Committee agreed to cancel the meeting on 13 January 2009.         `




Part 1 Audit Committee Minutes 25 November 2008                                                9
         Meetings in 2009 would be held at 10.30 on the following dates:

         •   Tuesday 17 February
         •   Thursday 19 March
         •   Tuesday 21 April (09.30 start to audit the 2008 accounts)
         •   Tuesday 23 June
         •   Tuesday 22 September
         •   Thursday 26 November.



The meeting ended at 15:30



Signed ……………………………….

Stephen Brooker         Chair

Date




Part 1 Audit Committee Minutes 25 November 2008                            10

				
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