The Solicitors Regulation Authority has identified compromises to independence and integrity - particularly in the personal injury and corporate sectors - as a key threat to the profession. 

In its latest Risk Outlook publication, the authority says solicitors acting without independence or integrity can damage public confidence in legal services and the rule of law.

The status of England and Wales as a jurisdiction of choice depends on such principles, added the SRA, especially during any changes regarding the UK’s membership of the EU.

‘Solicitors sometimes need to make difficult choices,’ said the report. ‘Their professional obligations may require them on occasion to decline a client’s request or even go against their wishes.’

In personal injury, the SRA has already made clear its concerns about firms allowing third parties to cold-call potential clients, bringing claims without clients’ authority, or entering into referral fee arrangements banned under the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

‘Firms who conduct cases which demonstrate one or more of these features may face regulatory action for breach of our principles or code. Further, this may give us reason to suspect dishonest by their principals or staff.’

The SRA reported that many corporate firms have said the balance of power between them and their clients has ‘shifted’, with the clients seeking to impose terms on the firm.

The regulator said in some cases this includes contractual terms restricting the firm’s freedom to act.

‘These can include "no sue" clauses, where the client intends to give the firm little work but is able to restrict the ability of opposing litigants to find representation. This sort of control by clients or by third-party funders can harm the independence of the firm.’

Other risks flagged up by the SRA include information security, standards of service, protecting client money, diversity, money laundering and - for the first time - lack of access to legal services.

Research shows one-third of people with a legal problem seek professional advice, with one in 10 seeking advice from a solicitor or barrister.

SRA chief executive Paul Philip said too many people either cannot afford, or choose not to access, legal services.

‘We are reforming the way we regulate to free up solicitors, and open up the market to healthy competition,’ he added.

‘We want providers to respond by playing their part in creating new, more affordable services that respond to the needs of the public and small businesses.’