SRA Professional Obligations Thematic Review

This recent thematic review was focused on the review and application of the SRA’s published information by legal professionals. Sounds unexciting, doesn’t it?

However, the report is an important read as it serves to shines a light on:

1. the SRA’s expectations of regulated firms around compliance and continuing competence
2. the role and responsibilities of COLP
3. the personal responsibilities of fee earners

The key point lies in the statement that:

“Our regulatory resources supplement the Standards and Regulations. This information helps explain emerging risks and the associated regulatory requirements. Firms should proactively review this material to safeguard the interests of clients and firms.”

In other words, lawyers can’t assume that their knowledge of the SRA Standards and Regulations is sufficient to ensure compliance. This point often comes up in discussions we have with law firms about AML compliance – in that, whilst compliance with Money Laundering Regulations and the Legal Sector Affinity Group Guidance is essential, full compliance also requires adherence to the various SRA guidance, warning notices, and other published materials. You ignore or overlook SRA publications at your peril!

Given the weekly appearance in the Law Society Gazette of yet more firms receiving eye-watering fines for AML compliance failings, the SRA should perhaps not be surprised by the finding that ‘compliance with our rules appeared to be motivated by a fear of negative consequences’. Nonetheless, our experience shows that proactive compliance (as opposed to seeing it as an administrative burden) can be used very effectively for the benefit of the firm (including its bottom line), its staff and its clients. We see this best demonstrated in Lexcel and CQS accredited firms, which build compliance into its day-to-day processes and use it to nurture team development and management controls.

So what are the key takeaways from the SRA’s Professional Obligations thematic review, and how can law firms build these into their compliance management?

A: Build the review and application of SRA resources into Learning & Development plans

The report complains that ‘There is a general lack of systemised reflection about our requirements and dissemination of our resources by both firms and individuals’. When reviewing L&D Plans at 1-1s or appraisals, law firms should ensure that the latest relevant SRA publications (e.g. guidance, webinars, reviews) are included. Perhaps ask your team to read/view and then discuss potential applications at a team meeting or training session.

A: Record reading/viewing of SRA materials in Learning & Development records

A tip for COLPs: when you circulate SRA newsletters by email, highlight any links you want fee earners to read, and require confirmation in a return email. Remind fee earners to record all regulatory activities, including reading SRA Guidance and warning notices, viewing SRA webinars, and attending meetings where regulatory requirements are discussed.

A: Remind fee earners of their personal responsibility to read the information the SRA produces and apply it to their areas of practice and individual needs.

The report states that ‘this is a key aspect of maintaining and developing professional knowledge and skills and meeting our continuing competence requirements’. Further, ‘the responsibility is personal to each solicitor and cannot be delegated’ to COLPs or other compliance professionals.

A: Review your risk communication (or breach reporting) procedure in the light of this report

Ensure fee earners are familiar with SRA’s Enforcement Strategy, which sets out which issues the SRA considers serious and should be reported.

A: Develop a values-based compliance culture, where ‘getting it right’ is rewarded as much as meeting financial targets

A good starting point is reviewing and reforming the firm’s appraisal system to include assessment of an individual’s cultural and compliance contributions.