Client Money & Change: Supporting Safeguards Across Legal Services

The Legal Services Board’s recent sanction of the Solicitors Regulation Authority (SRA) following the Axiom Ince case has sent ripples across the legal sector. This moment, while deeply concerning, offers a critical opportunity to pause, reflect, and reassess how we collectively manage and protect client money.

At Shieldpay, our mission has always been clear: to support the legal industry in modernising the way client funds are handled - reducing risk, building resilience, and enhancing trust between firms, clients, and regulators. We believe that enhancing consumer protection is a shared responsibility. That’s why we’ve long advocated for stronger safeguards around client money, including more rigorous oversight when ownership of a legal firm changes hands.

Learning from the Past, Building for the Future

In our response to the SRA’s recent consultations - including the Consumer Protection Review and Client Money in Legal Services - we made several recommendations aimed at strengthening the system. One of these was a call to mirror the Financial Conduct Authority’s (FCA) “Change in Control” process - an established regime used in financial services to ensure that firms cannot change ownership without regulatory scrutiny.

This isn’t about pointing fingers in hindsight, but rather reinforcing the direction of travel. The Axiom Ince case has made it abundantly clear that existing checks and balances around ownership and control need to evolve. We welcomed the SRA’s recognition of this issue, and we remain committed to being a constructive partner in delivering the change that’s needed.

A System Under Pressure

Client money management has become increasingly complex. Firms are navigating a fast-evolving landscape - balancing regulatory compliance with operational efficiency, managing cybersecurity threats, safeguarding against fraud, and meeting client expectations. The reality is that no one-size-fits-all solution exists, especially when you consider the diversity of firm sizes and practice areas across the sector.

However, what we’ve consistently heard from the firms we work with - from sole practitioners to top-50 law firms - is that the current model carries risks that are hard to ignore. Holding client money creates an ongoing regulatory burden and exposes firms to significant reputational and financial consequences if anything goes wrong.

At the same time, consumers rightly expect their money to be secure. When trust is lost - especially in high-profile cases - it’s not just individual firms that feel the impact; it affects the profession as a whole.

Reassessing the Role of the Client Account

The client account has long been seen as a core part of legal practice. Yet, we’re now at a point where it’s worth re-examining whether firms should hold client money - simply because they can. In our view, the availability of regulated alternatives means that firms have more choice today than ever before. Third-Party Managed Accounts (TPMAs) offer a credible, safeguarded route for firms that want to manage payments without taking on the full responsibility of holding client funds. These solutions are already being used successfully across a range of legal transactions - including conveyancing, litigation, and corporate deals.

As a regulated payment institution, Shieldpay provides TPMA services designed specifically for the legal sector. Our infrastructure brings control, transparency, and regulatory rigour - without compromising the flexibility and speed that legal professionals need.

Supporting Firms Through Change

We understand that change takes time - and it’s not always easy. Many firms have built their processes, pricing models, and client relationships around the traditional client account. Some are exploring hybrid models, using TPMAs alongside their client accounts. Others are looking to transition more fully as their risk appetite or regulatory obligations evolve.

That’s why we’re not calling for sweeping, immediate reforms. Instead, we’re calling for a measured, supported transition - one that gives firms the guidance, tools, and regulatory clarity to make informed choices. As we said in our consultation responses, this isn’t just about compliance - it’s about futureproofing the profession and protecting client trust in the long term.

A Shared Opportunity for Progress

The SRA’s consultation process has surfaced some essential questions. How do we protect clients in an increasingly complex and digital legal landscape? How can we make the handling of client money more transparent, secure, and resilient? And how can we work together - regulators, firms, and service providers - to deliver better outcomes?

We don’t pretend to have all the answers. But what we do offer is a platform and a partnership model that’s been purpose-built for this challenge. Our TPMA solution is designed to give firms visibility at the matter level, mitigate financial crime risks, and reduce the administrative burden that often comes with managing a client account. And, crucially, we operate under a regulatory framework that brings additional layers of protection for all parties involved.

Moving Forward, Together

If there’s one lesson to be taken from the challenges the profession is facing, it’s that greater collaboration and innovation are essential. The legal services sector is at a crossroads - and the decisions made now will shape the regulatory and operational environment for years to come.

At Shieldpay, we’re ready to play our part. Whether that’s through sharing insights, co-designing solutions, or supporting firms as they explore new models for managing client money, we remain committed to helping the industry move forward with confidence.

We hope that, as regulators and firms continue to reflect on recent events, the focus remains on building a more secure, transparent, and trusted legal ecosystem - because that benefits everyone.

Talk to a Client Money expert today to understand if Shieldpay could save you time or enhance the services you offer to your clients.