The Solicitors Regulation Authority would need ‘considerable’ resources to implement the recommendations of Nick Smedley’s report on corporate firm regulation, its chief executive said last week.

Antony Townsend told an SRA board meeting that ‘rising demands’ are being placed on his organisation. ‘We have the Smedley report recommendations and in order to regulate, the SRA needs to move quickly and have considerable levels of resources,’ he said.

Smedley’s report, published a week ago, calls for a new corporate regulation group (CRG) to be created within the SRA at an estimated cost of up to £3m.

Generally, his report provoked a positive response. David McIntosh, chairman of the City of London Law Society, described Smedley’s analysis as ‘right on the button’.

‘I’m looking forward to the moment when City firms and the SRA can work together towards a common goal: necessary regulation to bite effectively on those who transgress, but also to allow City firms to compete with other firms that are less regulated,’ he said.

The Legal Services Board welcomed Smedley’s report as ‘an interesting contribution to the debate about the future of legal services regulation, in the specific context of the solicitors’ profession.’

The LSB also welcomed what it called the Law Society’s recognition that it is for the SRA rather than the Society to decide on how far Smedley’s findings should be implemented.

Nick Jarrett-Kerr, partner at management consultancy Kerma Partners, suggested that the creation of the CRG could lead to calls for further regulatory bodies to be formed to cater for other areas of the profession. ‘We may end up with more fragmented regulation,’ he warned.

Jarrett-Kerr said he believes City firms will be happy to implement Smedley’s recommendations if they are not watered down, but that the cost of a new regulatory system could be an issue: ‘Are the City firms going to have to pay extra for this even though they say they pay more than their fair share already?’