Assure

In April the Scottish Government announced a Legal Services Review chaired by Esther Roberton, the Chair of NHS24.

The review commenced its work by receiving information from the Society following the original paper put to Scottish Government in December 2015 seeking a new enabling Act to allow the regulation of the legal profession and legal services to be brought up to date for the 21^st century and to be futureproofed. 

Earlier in the year an event was held involving the complaints team, the Regulatory Committee and others currently involved in various parts of the complaints process to consider how a new complaint process might look, given the challenges presented by the system which currently exists under the Legal Profession and Legal Aid (Scotland) Act 2007.  A number of views were discussed and a benchmarking exercise undertaken with other jurisdictions and professions to investigate how they deal with conduct and consumer complaints.

As a result of that, an updated paper will go to the Legal Services Review when they call for evidence in early 2018.  The Society will propose a clear model for dealing with complaints in the future.  In addition, the Society will propose immediate amendments to the current legislation which would improve the speed at which complaints flow through the process, in particular looking at the eligibility process operated by the Scottish Legal Complaints Commission. 

The committee believes that it is important that a complaint system is fair to all parties involved, and that it is simpler and more transparent than the current system appears to be.

In the early part of the year the appeals to the Court of Session arising from the Anderson Strathern case progressed.

The Regulatory Committee agreed with the decision of the Council that it was right to challenge the Scottish Legal Complaints Commission about its approach to categorisation of complaints following the outcome of that appeal, and whilst judicial review was contemplated at one stage, it was decided to take matters forward on the basis of a series of appeals.

The reason for seeking a Court Decision in this area was to bring certainty to the process because there was, as acknowledged by the Court in its Judgement, room for doubt as to what was intended. 

Whilst the Society’s position was not vindicated by the Court, the outcome has brought certainty and has again highlighted the challenge of the current system and the need for reform.

The Regulations bringing the Directive in to force were passed in June 2017.  The Society contributed to the consultation exercise, although the final regulations turned out to look very different to those which had originally been suggested.

The Regulations do bring some additional regulatory burden for the profession, and equally, the Society, as an Anti-Money Laundering Supervisor, now has further obligations which will be overseen by the newly created Office for Professional Body Anti-Money Laundering Supervisors (OPBAS).  OPBAS takes over this role from HM Treasury and will be charging the Supervisors for their oversight work, unlike HM Treasury.

The Society has worked hard to develop an AML regime for big firms, in particular, and the work done over the course of the year has moved the Society forward significantly in this area.  As the year ends work continues to be done on the guidance in relation to anti-money laundering, which is common across the whole UK legal sector, and, in addition to that, work continues to be done to finalise Practice Rules which will implement the regulations under the Directive.  The challenge at the present time with this is that there needs to be amendment to the Solicitors (Scotland) Act 1980 to enable the Society to carry out its supervisory functions in a proper manner and these issues are being pursued both with Scottish Government and HM Treasury.

The Society’s internal auditors again this year looked at three regulatory sub committees.  It was reassuring that their report indicated “substantial” assurance but there were six recommendations which it was agreed to implement across regulatory sub committees.

Amongst the recommendations was the need to ensure that criteria for decision making are clear and known to those making the decisions, as well as being transparent to those who are the subject of these decisions; that the scheme of powers delegated by the Council to the Regulatory Committee, sub committees and executive is adequate, and that powers are delegated at the right levels; and to ensure that the papers being given to regulatory sub committees are appropriate and sufficient to enable them to make reasoned, consistent decisions.

A number of issues have come up over the course of the year which the Regulatory Committee have discussed connected to the Legal Services Review:

(a)   Entity Regulation

This issued was discussed again and the Council, in a debate which followed a discussion by the Regulatory Committee, reaffirmed its commitment to entity regulation, although the detail will need to be worked out at a later stage.

(b)   The Unregulated Sector

This issue was highlighted in various discussions arising from a review of designated bodies under Section 35 of the Solicitors (Scotland) Act 1980.  Work was done in order to regularise the way in which designated body applications were dealt with, and as a result of this the question of those in legal services providing advice who are not regulated was highlighted. 

This led to work being carried out, including public polling, in order to establish whether members of the public differentiated between solicitors and lawyers.  The result clearly indicated that the majority of the public did not make this distinction, and one of the issues now covered in the Society’s representations to the Legal Services Review is the need to treat the title “lawyer” as equivalent to that of “solicitor”.

During the course of the year the Rules, Waivers and Guidance Sub Committee continued its consideration of the “raising concerns” issue and conducted a review of the current Conflict of Interest rules and guidance.

During the latter part of the year a consultation was held in relation to the introduction of rules relating to raising concerns.  The consultation drew a number of responses with different views, and these are being considered by the Rules, Waivers and Guidance Sub Committee with a view to a formal report to the Regulatory Committee for consideration, in particular as to whether or not matters should move forward by way of rules or guidance.

That subcommittee has also undertaken a significant amount of work in reviewing the current conflict of interest rules and guidance.  In the course of the next year it is likely that a proposal will come forward in this area, which will be consulted on with members.

In January 2017 the Society was approved as a Regulator by the Scottish Government, but was not yet authorised.

Authorisation remains some way away as work has still to be done internally in relation to the building of various systems and guidance in respect of licensed providers, but discussions continue with Scottish Government about the need to lay certain regulations, in particular around complaints, both in relation to licensed providers and approved regulators.

The Scottish Government will delegate responsibility for dealing with complaints against approved regulators to the Scottish Legal Complaints Commission, but there remain challenges at this stage in understanding how the system will work and who will be responsible for payment for the system, including its set up costs.

The Regulatory Committee also had input in to the Budget and Levy Consultation by the Scottish Legal Complaints Commission, which the Council responded to in the early part of the year.

The Committee were concerned at the proposed level of the increase in the levy to be paid by the legal profession, particularly against a continuing background of complaints taking too long to be dealt with without a clear and adequate explanation as to why this was the case, given that numbers were increasing but  not at a significant rate.  The Committee continues to be concerned by the lack of meaningful oversight of the work of the Commission.

The annual report contains statistics for conduct complaints for the past year.  These figures are closely scrutinised by the Regulatory Committee and discussed with the relevant executive officers and subcommittee conveners.

The total number of complaints fluctuates slightly from year to year.  In the year 2016/17, as a result of the appeals to the Court of Session, a number of complaints had to be suspended for a significant period of time.  This has meant that the number of cases disposed of during the year was lower than it might otherwise have been given that the outcome of the Court case was not determined until June.

It is anticipated, as a result of additional resource added to the complaints team, that over the course of the next 12 months, subject to there not being a significant increase in the number of complaints received, that it will be possible to catch up and reduce the current live load.

We continued to embed our equality and diversity standards during the year. Take-up across the profession has been relatively slow. If this continues to be the case, the Equality and Diversity Committee will need to look again at how best to embed these standards.

Early in 2017, alongside the GLASS Network, we hosted a digital campaign called #TheseAreOurPrinciples. Numerous leading lawyers – including the Rt Hon Nicola Sturgeon and Professor Hector MacQueen – took part in the campaign which gained widespread engagement and support from the profession. In the spring we re-issued an updated version of our ‘Preventing Bullying and Harassment’ guidance.

We hosted a well-attended Equality Means Business conference with the Lord Justice Clerk, Lady Dorrian, and Alan Masson, the then Chief Operating Officer of Anderson Strathern, providing keynotes as well as numerous informative panels.

We hosted the launch event of the Scottish Ethnic Minorities Lawyers Association with the President of the Society, the Dean of the Faculty of Advocates and the Lord Advocate all speaking. We have worked closely with SEMLA, GLASS and Women In Law Scotland over the course of the year.

We have an overarching objective of leading legal excellence and to be a world-class professional body, understanding and serving the needs of our members and the public.

We are pleased to set our gender pay report in accordance with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Under these regulations we are not required to report, however, we believe it is important to our staff, our members and the wider public that we do so.

The table shows the mean and median gender pay gap based on hourly rates of pay as of 5 April 2017. It also shows the mean and median differences paid to men and women in the 12 months prior to 5 April 2017.

We do not pay bonuses. We do have a system of performance related pay. This is part of our contractual pay awards.

The above table illustrates the gender distribution at the Law Society of Scotland across four equally sized quartiles, each containing just over 30 staff.

Looking at the gender breakdown within quartiles:

• 77% of roles in the lower and lower middle quartiles are held by female staff.
• 55% of roles in the top quartile are held by female staff.

Looking at the distribution of male and female staff across the Society:

• 54% of female staff at the Society work in the lower two quartiles whereas 37% of men work in those quartiles.

A large part of our pay gap can be attributed to the distribution of males and females within the organisation. Given our breakdown in males and female staff, males disproportionately feature in the top quartile whereas females disproportionately feature in the lower and lower middle quartile.

We use recruitment channels which are equally accessible to males and females. We also use a blind shortlisting process.

Understanding our gender pay gap

We have taken a close look at what lies behind our gender pay gap and have concluded that:

• Under the regulations, only organisations who employ over 250 people are required to report. We recognise that due to the size of our organisation – 127 staff at time of reporting – a small number of changes in staff may lead to relatively large changes to the mean and median figures.
• We are confident that men and women are paid as equally as possible for equivalent roles. The reason we say as equally as possible is that there will be a small difference between similar roles due to the impact of performance-related pay.
• We use a job evaluation system to determine the value of our roles in relation to others in the organisation and position pay fairly in relation to benchmarking data supplied by our external job evaluation service provider. It is likely that there are some historical pay issues which will have an impact upon the pay gap but this is minor. For instance, there may be a small number of staff whose salaries were set prior to us implementing our job evaluation system.
• Whilst we have some way to go, the gender balance in our top and upper middle quartiles is encouraging evidence that our efforts over recent years to attract and retain women in more senior roles is paying off.
• We have a more significant gender imbalance within our lowest quartile and lower middle quartile. The roles that sit within these quartiles are predominantly administrative although a small number of managers that oversee service delivery are in this quartile. Whilst we believe these roles are fairly rewarded with reference to the market, the fact that so many of them are held by female staff has the effect of reducing the average pay of our female staff impacting our overall gender pay gap.

It was helpful to conduct this exercise as it has provided us with new impetus and ideas to add to our equality and diversity strategy.

What are we going to do next?

• Gender equality is not solely a women’s issue. We understand that gender equality is everyone responsibility. In recognising this, we commit to:
  • Offer unconscious bias training to all staff. We understand that we all have unconscious biases and the first step to tackling them is recognising that.
  • Ask our colleague forum to consider how and where we can improve.
  • Exploring how we can use our leading mentoring programme for our members to benefit our own staff.
  • Our Senior Leadership Team championing gender equality across all of our activities.
• Continue being agile in our approach to career paths: offering and encouraging all of our staff, male and female, the opportunity to work in a flexible way throughout their careers. We already offer to all staff flexible working, part-time working, and sector-leading parental leave.
• Measuring and publishing internally the gender breakdown of applications at each stage of the recruitment process: We want to ensure that all our roles at all levels are attractive to males and females. Although our application process is blind we can export equality data without identifying individuals. We will publish information on applications, those selected for interview, and those subsequently appointed to understand if there are any challenges in the recruitment process.

Lorna Jack
Chief Executive Officer