The SRA and Economic Crime: Is It Time to Dismantle the SRA?

Why this matters

Economic crime is not a peripheral issue for legal services. Solicitors and law firms may handle client money, verify identity, structure transactions, advise companies, conduct conveyancing, form trusts, manage estate planning and move funds through client accounts.

Those functions can support lawful commerce. They can also be misused by criminals, fraudsters, sanctioned persons and those seeking to conceal ownership, move illicit funds or give suspicious transactions the appearance of professional legitimacy.

The Legal Services Board consultation therefore raised a necessary question: how should legal regulators respond to economic-crime risk in a sector where professional status itself can be used as a gateway to trust?

The new economic-crime objective

The Economic Crime and Corporate Transparency Act 2023 has changed the regulatory landscape. The prevention and detection of economic crime now sit expressly within the regulatory architecture for legal services.

At face value, that is a positive development. It recognises that legal services can play a pivotal role in either enabling or disrupting economic crime. It also gives oversight regulators a clearer basis for asking whether frontline regulators are doing enough.

For the SRA, however, the new objective is also a stress test. It is one thing to publish guidance, conduct inspections and record enforcement action. It is another to demonstrate that supervision is timely, consistent, transparent and strong enough to deter abuse.

The SRA’s track record and the confidence problem

The SRA has published significant AML and sanctions activity, including inspections, desk-based reviews and enforcement action. That activity matters. It shows that the regulator is not inactive.

But activity is not the same as confidence. The criticism made by many practitioners, commentators and affected members of the public is that SRA enforcement can appear slow, opaque, inconsistent or insufficiently accountable.

This is the issue the source article confronts directly. If a regulator expects solicitors to demonstrate independence, integrity, transparency and accountability, the regulator itself must be held to comparable standards in its own decision-making.

That distinction is critical. A regulator can be busy and still fail to command confidence if its reasoning is not visible, its sanctions appear uneven, or its response to systemic failure appears defensive.

Why process improvement may not be enough

The Legal Services Board’s consultation approach appears to assume that legal regulators can improve by refining risk assessment, education, monitoring, compliance evaluation and enforcement strategy.

Those measures are necessary, but they may not be sufficient. If the underlying problem is cultural or structural, then better process language will not resolve it. A regulator that is defensive, slow to explain itself, or reluctant to confront powerful actors will struggle to deliver credible economic-crime supervision regardless of how polished its framework becomes.

The risk is a familiar one: reform becomes an internal management exercise rather than a public-accountability exercise. Policies are updated. Guidance is refreshed. Reporting improves. But the public still cannot see whether the regulator is more willing to act decisively when serious risk appears.

The structural question: reform or rebuild?

The source article argues that the SRA should no longer be entrusted with solicitor regulation in its current form. That is a serious proposition and should not be made lightly.

The more precise question is whether the SRA can be made sufficiently transparent, accountable and effective through stronger oversight, or whether legal-services regulation requires deeper structural redesign.

That question should be answered by evidence, not frustration alone. It requires close scrutiny of enforcement consistency, handling of high-risk firms, use of AML powers, treatment of whistleblowers, transparency of decisions, response to regulatory failure, and the practical experience of consumers and smaller firms.

What a better regulatory model would require

Whether the answer is radical reform or replacement, the principles are the same. Economic-crime regulation needs a regulator that is independent, transparent, intelligence-led, proportionate and visibly accountable to the public interest.

The legal profession should not be regulated by fear, box-ticking or symbolic enforcement. It should be regulated by clear standards, credible supervision and consistent consequences.

The goal is not heavier bureaucracy for its own sake. The goal is a regulatory system capable of preventing abuse before consumers, victims and the profession are left to absorb the damage.

The closing point: a test the SRA cannot avoid

The economic-crime objective creates a moment of decision for legal-services regulation. It asks whether regulators are willing to move beyond guidance and into serious prevention, detection and accountability.

For the SRA, the question is especially acute. If it can show transparent, consistent and effective supervision, then the new objective may strengthen public confidence. If it cannot, then the argument for structural reform will become harder to dismiss.

The Legal Services Board should not treat this as a compliance exercise. It should treat it as a public-interest test. Economic crime thrives where professional gatekeepers are weakly supervised, warnings are missed and regulatory explanations arrive too late. If the current model cannot meet that challenge, then the model itself must be reconsidered.