For a junior lawyer securing a practising certificate is essential to legally practise law in the UK. The costs associated with obtaining and renewing a practising certificate can be a significant amount, especially when you’re embarking on your legal career. Fortunately, there are several funding solutions available to help ease this burden. In this blog, we’ll explore the various options for covering fees for practising certificates and provide practical tips for managing these costs.
Why Practising Certificate Costs Are Rising
Practising certificates are essential for solicitors, but the costs associated with them have steadily increased due to several factors.
- Regulatory Changes: Legal bodies have introduced stricter regulations, leading to higher administrative and compliance costs, which are passed on to solicitors.
- Inflation: Just like other professional fees, practising certificate fees have been impacted by inflation, resulting in annual increases.
- Operational Costs: Regulatory authorities, such as the Solicitors Regulation Authority (SRA) incur operating costs related to overseeing and auditing solicitors, this can be a large contributor to rising fees.
For junior lawyers this rise can be particularly difficult to manage, however there are several funding solutions available to help offset the costs.
Funding Solutions for Practising Certificates
To manage the rising costs of practising certificates, junior lawyers should explore various funding options. Here are the top solutions:
1. Employer Support
One of the most common funding solutions for practising certificates is employer support. Many law firms, especially larger firms cover or contribute towards the cost of practising certificates as part of their employee benefits package. If you’re joining a law firm or are already employed, it’s worth having a conversation with your employer to determine if they offer any financial assistance for practising certificates.
How to Approach This:
- Ask about practising certificate contributions during your job interview or when discussing benefits.
- If your firm doesn’t have a formal policy, consider negotiating this as part of your compensation package.
2. Financing Options and Loans
For those unable to rely on employer support, financing options are available to spread the cost of practising certificates. Short-term loans or instalment plans provide lawyers with a good option to manage the payment without draining their savings.
Some financial institutions and legal bodies offer loans with favourable terms to help cover practising certificate fees. When exploring this option, it’s important to compare interest rates, repayment schedules, and any associated fees to ensure it’s a cost-effective solution.
3. Professional Grants and Scholarships
Some professional bodies and legal associations offer grants or scholarships specifically aimed at reducing practising certificate fees, particularly for junior solicitors, legal aid workers, or those in less profitable practice areas.
Where to Look:
- The Law Society and other legal organisations have been known to offer funding or reduced rates for newly qualified solicitors.
- Research local or regional grants may be available for solicitors in specific practice areas.
- By taking advantage of these opportunities, junior lawyers can significantly reduce the cost of their practising certificates.
4. Tax Deductions
Practising certificate fees are often considered a business expense, meaning they may be tax-deductible. For junior lawyers who are self-employed or work as independent contractors, claiming practising certificate fees as a tax deduction can reduce the overall financial burden.
How to Claim:
- Consult a tax advisor to ensure you properly document and deduct practising certificate fees on your tax return.
- Ensure that you keep all receipts and proof of payment as part of your financial records for tax purposes.
5. Payment Plans Offered by Regulatory Bodies
In some cases, regulatory bodies like the SRA offer payment plans that allow solicitors to spread the cost of practising certificates over several months. These plans can make the payment more manageable by reducing the need for a large lump-sum payment at the time of renewal.
Benefits of Payment Plans:
- Easier to fit into monthly budgets.
- Allows you to maintain financial liquidity while covering essential professional fees.
Tips for Managing Practising Certificate Costs
Managing the cost of your practising certificate doesn’t have to be overwhelming, here are some additional tips to help you stay on top of these expenses:
- Start Saving Early: As soon as you know the cost of your practising certificate, set aside money each month to cover it. This will prevent a large one-time expense from hitting your budget hard.
- Compare Funding Solutions: Don’t settle for the first option you find, it is essential to compare employer support, loans, grants, and other funding solutions to see which offers the best terms for you.
- Consult a Financial Advisor: If you’re unsure about which funding solution is right for you, consult a financial advisor who can help you evaluate your options and choose the best course of action.
While the cost of practising certificates may be rising, there are numerous funding solutions available to help junior lawyers manage these expenses. From employer support and financing options to grants, tax deductions, and payment plans, you have plenty of options to explore. By taking the time to research your funding options and plan ahead, you can cover the cost of your practising certificate without straining your finances.
Contact Business Finance House today and let our expert team guide you to the best financial solutions tailored to your needs.
