LSB Chair Promises Greater Scrutiny of Regulators

Detected March 27th, 2026

Summary

The incoming chair of the UK's Legal Services Board (LSB), Monisha Shah, has indicated a shift towards greater market surveillance and more proactive oversight of frontline legal regulators. This change in approach follows high-profile failures of large law firms and criticism of the LSB's previous 'light touch' supervision.

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What changed

Monisha Shah, the incoming chair of the Legal Services Board (LSB), has signaled a move away from 'light touch' oversight towards more proactive and risk-sensitive market surveillance of legal regulators. This strategic shift is a direct response to recent high-profile failures of large law firms, such as Axiom Ince and SSB Law, which resulted in significant consumer detriment. Shah emphasized the need for ongoing, intelligence-led supervision rather than periodic and reactive assessments, particularly for growing firms with complex structures.

Compliance officers within legal firms and regulatory bodies should anticipate increased scrutiny from the LSB. The focus will likely be on authorization processes, risk assessment, and market surveillance to prevent future failures. While no specific compliance deadlines are mentioned, the stated intention suggests a near-term increase in regulatory expectations and potentially more rigorous performance assessments for entities overseen by the LSB. Firms should prepare for a more interventionist approach from the LSB, especially concerning authorization and ongoing monitoring.

What to do next

Review LSB's performance assessment framework for upcoming changes.
Enhance internal risk assessment and market surveillance capabilities.
Prepare for increased scrutiny on authorization processes for growing firms.

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The incoming chair of the Legal Services Board has signalled that frontline regulators will face a new type of scrutiny in the wake of high-profile failures.

Monisha Shah, the government’s preferred candidate for the post, faced questioning ahead of her appointment from the House of Commons justice committee yesterday.

MPs probed her on her experience and knowledge of the legal sector, how she would fit in the job around her six other roles, and how she saw the oversight regulator changing in response to events of the past two years.

This is a critical time for the LSB: it has criticised regulators such as the Solicitors Regulation Authority and BSB for their failings and is also subject to an ongoing review by the Ministry of Justice about its own effectiveness.

Asked specifically about enforcement action against the SRA following the collapses of law firms Axiom Ince and SSB Law, Shah said she was aware of the accusation that the LSB oversight of regulators was ‘light touch’, and stressed the need for the organisation to be more pro-active.

‘When enforcement action is necessary the harm has already occurred,’ she said. ‘To me that demonstrates a need for greater market surveillance both from the frontline regulators but also from the LSB. There are some very clear lessons to be learnt from that experience and event. Consumer detriment is incredibly significant when large law firms fail and that should never be under-estimated.

‘In the current climate I think that the authorisation processes need to be more risk-sensitive especially for growing firms with complex ownership and funding structures.’

Monisha Shah faces questioning from MPs

Former TV executive picked to chair LSB

The LSB holds regulators to account through a performance assessment framework which assesses how these organisations meet certain criteria and reports once a year. Infamously, the SRA received top ratings in the LSB’s assessment published in February 2024 – just months after making multiple errors in the handling of the Axiom Ince affair. This assessment led the LSB to conclude that the SRA’s performance ‘raises no concerns’.

Shah said there is now a need for a ‘different kind of supervision that has to be ongoing and intelligence-led rather than simply periodic and reactive’.

Shah insisted she would be able to fit her LSB role – for which she will work 70 days a year for a £63,000 salary – alongside her six other non-executive positions. She said her existing commitments take up between two and a half and three days a week, leaving enough time to devote to her legal role.

She will step down as a trustee of one charity in June and will leave her position as chair of the panel that recommends lawyers for appointment as King’s Counsel at the end of next year. Shah stressed there was no conflict in the meantime between the KC position and being chair of the LSB.

With a background largely in the media – she was a BBC executive for more than a decade – Shah admitted she had little experience of managing an organisation subject to public scrutiny or a public bodies review. But she added she was confident she would be able to ‘add value’ to the work of the LSB.

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