Rising SRA pressure: a turning point for operational risk in law firms

Recent headlines around increasing misconduct reports to the Solicitors Regulation Authority (SRA), alongside concerns over regulatory funding pressures, reflect a legal sector operating under growing strain.

While much of the conversation has understandably focused on rising costs and regulatory burden, the bigger issue may be operational complexity. Law firms today are balancing increasing client expectations, evolving compliance obligations, talent pressures and growing demands for transparency… all while trying to maintain profitability and service quality.

In that environment, compliance can no longer sit at the edge of legal operations; it has to be embedded within.

Rising pressures are exposing operational gaps

The reported rise in misconduct concerns should not automatically be interpreted as evidence of worsening standards across the profession. In many cases, it reflects the reality that firms are operating in more demanding and higher-risk environments than ever before.

Hybrid working models, increasing caseloads, fragmented systems and growing administrative pressures can all create conditions where risk becomes harder to monitor and manage proactively.

For many firms, compliance processes are still heavily reliant on manual checks, disconnected systems and retrospective reporting. That creates blind spots, especially as firms scale or manage increasingly complex matters across different teams and locations. 

Compliance is becoming an operational issue

Historically, compliance has often been treated as a specialist or back-office function. But the direction of travel across the legal sector suggests that approach is becoming less sustainable. Plus, with the rise of prevalent cyberattacks on the legal sector, security and risk management really need to be at the forefront for many firms. Enhanced training should be provided for all legal professionals, to clearly establish that prevention is key and cybersecurity should the responsibility of everyone firm-wide, not reserved for IT.

Today, risk management touches almost every aspect of legal operations:

• Matter management
• Document handling
• Client onboarding
• Financial processes
• Client communications
• Audit trails
• Data & governance

When these processes sit across disconnected platforms or rely heavily on manual intervention, firms face greater operational risk and reduced visibility. This is why many firms are now rethinking compliance not as an isolated obligation, but as part of their broader operational resilience strategy.

The firms adapting most successfully are those that have taken the time to really articulate their future strategy, then invest in more connected systems, clearer workflows and better access to operational insight.

Technology’s role is changing

For years, legal technology conversations have focused heavily on efficiency and productivity. Those benefits remain important, but now the conversation is shifting.
Increasingly, firms are looking at how technology can also help reduce risk exposure, improve governance and support defensible compliance practices.

That includes:

• Centralised visibility across matters and workflows
• Automated audit trails and reporting
• Reduced duplication and manual processing
• Improved consistency across teams
• Better identification of operational bottlenecks

AI will also play an increasing role, particularly in helping firms manage information volume, identify potential risks earlier and reduce administrative burden on legal teams. But successful adoption will depend on governance, clear strategy, with transparency and strong integration into existing processes.

Technology alone is not the answer. However, firms that continue relying on fragmented processes and siloed systems may find it increasingly difficult to keep pace with the complexity of the modern regulatory environment.

A sector-wide challenge

The current debate should not be viewed purely through the lens of regulatory tension between firms and the SRA.

In reality, the legal sector as a whole is facing rising complexity. Regulators are under pressure to manage increasing volumes and expectations, firms are balancing commercial and compliance pressures simultaneously, and wider legal professionals are being asked to do more within increasingly demanding environments.

All of these factors combined make operational resilience and compliance an increasingly important differentiator for the legal sector. As the sector evolves, the conversation needs to move beyond whether regulation is becoming more expensive, and towards how firms can build more connected, resilient and future-ready operations in response.

For more information on how IQ for Legal by OneAdvanced can support your firm please visit: IQ for Legal | Legal Software for UK Law Firms | OneAdvanced.