“We set the PC fee in July 2002 and then our council voted to expand the regulation directorate,” a society spokesperson explained.
The society has budgeted to spend just under £89.7m in 2003 and will have an income of £82.6m.
It is not unusual for the Law Society to experience significant holes in its balance sheet.
In 2001 the society was running at an estimated £5m deficit; last January The Lawyer revealed that the society had a £12m hole in its final salary pension scheme (The Lawyer, 7 January 2002); and last May it emerged that it had gone £3m over its legal budget, spending £7.4m on external advisers, largely to defend former vice-president Kamlesh Bahl's various claims against it.
Law Society chief executive Janet Paraskeva said: “Following a projected surplus in 2002, the [Law Society] Council has simply made provision within the 2003 budget to take account of the decision to invest further in enhanced regulatory work, a decision which was taken after the Practising Certificate Fee had been set for the forthcoming year.”