Behind the briefcase: The human cost of legal compliance
By Sam Bray
If you’re interested in understanding the personal impact of compliance on legal professionals, read this write up of this week’s powerful webinar (“Wellbeing in the law“).
This panel discussion with LawCare, The Solicitors’ Charity and the Law Society looked at the emotional toll that regulatory demands place on solicitors. Issues like burnout, anxiety, and the fear of making mistakes are common.
It also provided information about the support these organisations can offer.
The recording link is below.
The April 2025 Legal Sector Affinity Group (LSAG) guidance updates – what you need to know
The latest LSAG guidance update might look minor on the surface, but there are still important reminders for law firms.
These tweaks and subtle shifts don’t radically alter AML expectations, but they do reinforce existing obligations around UBO identification, supply chain awareness, and understanding FATF high-risk countries.
If you’re looking for a clear-headed take on what’s changed (and what hasn’t), including what your firm actually needs to do, read this five-minute explainer.
Handy tips for surviving an SRA investigation
In this post, Ed Marshall shares practical tips for navigating an SRA investigation – straight from a former SRA Investigation Officer turned compliance consultant. Whether you’re dealing with a self-report, responding to that dreaded two-week email, or wondering how best to mitigate the risk of escalation, this post is important reading.
Covered in the post:
Self-reporting: Be proactive, not perfect. A thoughtful report sets the tone.
Extensions: You can ask for more time—do it early and sensibly.
Enforcement Strategy: Frame your response with the SRA’s own priorities in mind.
Legal advice: If things might escalate, early advice is money well spent.
News and Guidance
1. Expert witnesses under scrutiny
The Royal Institution of Chartered Surveyors (RICS) has issued a Practice Alert warning surveyors acting as expert witnesses – especially in housing disrepair cases – to uphold core professional standards. The regulator is concerned about generic, template-driven reports, misrepresented qualifications, and conflicts of interest arising from repeat instructions in high-volume work. Contingent fee arrangements are also flagged as a risk to independence. A reminder that expert evidence which is not tailored, honest, and impartial risks undermining the legal system.
2. SRA sanctions compliance update
The SRA has refreshed its guidance on complying with the UK financial sanctions regime. The revised version includes:
A clearer structure and layout
A new case study on inadvertent sanctions breaches
Strengthened red flags for staff screening and self-reporting
Clarified obligations around licensing and ownership thresholds
The SRA’s message is that every firm must implement robust systems to prevent sanctions breaches. This is strict liability territory.
3. Speaking up – whistleblowing guidance
The Law Society’s latest Practice Note on raising concerns reinforces the duty on solicitors to report serious breaches, whether by colleagues or the firm itself. It explains the legal protections under the Public Interest Disclosure Act (PIDA) and outlines when reports should be made to the SRA versus internal channels like the COLP or COFA. Crucially, firms are reminded that whistleblowers must not suffer detriment and that privilege must be respected when client matters are involved.
4. Economic crime reforms
The Law Society’s updated summary of the Economic Crime Act 2022 brings fresh urgency to compliance in real estate and corporate work. Highlights include:
A reminder of the Register of Overseas Entities (ROE) requirements
Tougher Unexplained Wealth Orders (UWOs)
Lower thresholds for sanctions breaches
Planned Companies House reforms
Firms must now verify beneficial owners of overseas entities and understand the new reporting expectations—or face restrictions on transactions, financial penalties, or even criminal prosecution.
5. Data retention: between a rock and a hard place
A recent Law Society Q&A addresses a familiar dilemma. Under the Money Laundering Regulations 2017, personal data collected for AML purposes must be deleted after five years. But professional negligence claims have a six-year limitation period. Many files have to be kept longer than six years. The Law Society says that to retain data longer, firms need explicit client consent – typically through an acknowledged engagement letter. This tension creates a compliance blind spot.
Is the Law Society’s analysis correct?
6. Time to prepare for the SRA’s diversity data exercise
The SRA’s next diversity monitoring exercise lands this summer. Every regulated firm – no matter how small – must collect, report, and (in most cases) publish anonymised data on the make-up of their workforce. Areas covered include age, gender identity, ethnicity, religion, sexual orientation, education, and caring responsibilities.
While participation is voluntary for individuals, firms must still report and publish. Failure to comply can result in regulatory action, including fixed penalties. See also: Sole Practitioner Hit With £750 Fine For (Wait For It) Not Completing A Workforce Diversity Survey.
Compliance corner – real life Q&As
Q: Can a firm keep interest on estate funds if the partners are trustees?
The question:
A practitioner raised this scenario: partners of a law firm are acting as executors and trustees of an estate. The firm operates a compliant interest policy under Rule 7.1 of the SRA Accounts Rules, allowing them to retain a portion of interest earned on client account balances. The question was whether it’s permissible for the firm to retain interest in this situation, or whether it creates a conflict of interest given that the partners are also trustees.
The answer:
This isn’t a conflict – provided that:
The retained interest is the firm’s business income, not a personal gain by the partners as trustees.
The interest policy is objective, transparent, and compliant with Rule 7.1 (i.e. the client—or third party—is receiving a “fair sum”).
There is no element of secret profit, and the policy should be clearly disclosed.
If the firm is acting in the best interests of the estate and with proper independence, there should be no conduct issue.
However, it’s a classic example of a situation where perception matters. The partners may decide that the optics of retaining interest in this situation risks prompting a complaint.
In reality, if independent solicitors had been instructed they would likely have retained interest on the same basis so the estate is at no detriment.
The real compliance risk lies not in the interest itself, but in the perception that the matter is being unduly delayed to generate additional interest income.
Document your reasoning, stick to your interest policy, and watch out for unjustifiable delays.
This is not legal advice. If you have a question you would like us to answer in this section, feel free to send it to info@jonathonbray.com
Free CPD
Recording: Wellbeing in the law
“I’ve had people in tears on the phone – not because they’ve done anything wrong, but because they might have.”
That’s what our team hears regularly from risk and compliance professionals in law firms.
In our latest webinar, we brought together wellbeing experts from LawCare, The Solicitors’ Charity, and the Law Society to talk about the invisible pressure on those who keep law firms compliant.
Included in the panel discussion:
COLPs, COFAs and law firm managers are carrying heavy emotional burdens
There are free, confidential support services available (but many don’t know about them)
Law firm leadership must actively support wellbeing – it’s not just an HR issue
Regulators are now linking firm culture to regulatory outcomes
This was one of the most powerful sessions we’ve hosted.
Read our full write-up here.
Recording available here (passcode Ggum$W2Y)
Disciplinary Watch
AML enforcement continues at pace
Another wave of anti-money laundering fines shows the regulator has no sign of slowing its AML fines. Firms fined include:
Warcup Law Firm Limited – £15,598
Callidus Law Limited – £11,232
Holden Smith Law Limited – £36,622
Mears Hobbs & Durrant – £10,670
Legal & Property Limited – £19,116
Idiculla Solicitors – £5,375
Lisa Tonge Solicitors – £658
Matter-specific risk assessments remain a key area of focus for the SRA.
Client account misuse: still a common pitfall
Two solicitors (Sally Louise Hutchings and Deidre Douglas) – were fined and rebuked respectively for using the client account as a banking facility. The SRA continues to clamp down on this, even when no client harm is apparent. The rule is clear: no holding or moving money unless it’s for an underlying legal service. Although, I wonder how many would have spotted this issue in the Hutchings decsion.
Non-lawyers in the spotlight
Several non-lawyers were removed from the profession this month for serious misconduct:
Saquib Zia – transferred ownership of a regulated firm without SRA approval.
Christopher Takamitsu Foster – misappropriated over £200,000 from estate files.
Ian Groome – knowingly misled the Land Registry in an application.
Christopher Harris – misled a client about the progress of a complaint.
These cases are a reminder that regulatory accountability extends beyond qualified solicitors and that integrity matters.
Lower-level conduct still attracts sanctions
Not all cases involve dishonesty or criminality – some relate to poor systems or lack of care. Eleanor Pullen was rebuked for taking shortcuts in conveyancing. Karen Rieveley and Aminta Sherine Silva were rebuked over residual balances and suspense ledgers.
Friendly reminder: Staying on the roll
If you’re a non-practising solicitor and want to remain on the roll, you must actively apply via mySRA – it’s not automatic. The SRA’s annual process requires you to confirm your status and pay a £20 fee. Failure to apply means removal from the roll, so if you wish to keep your status, make sure to complete the process before the deadline. The application window is 3 April to 28 May 2025. For full details and to apply, visit the SRA website.
Training your team: Anti-money laundering
The SRA expects that all ‘relevant employees’ practicing within the scope of the Money Laundering Regulations (MLRs) must receive robust anti-money laundering (AML) training. Now is the time to ensure your firm is compliant. Failure to meet these obligations can result in significant fines and regulatory action.
Our comprehensive AML training is designed to equip your team with the knowledge and practical skills needed to identify, prevent, and report suspicious activities, safeguarding your firm from risk. Ensure your firm stays ahead of regulatory requirements and avoids potential pitfalls by enrolling your team today.
Formats available: Online | In person | On-demand
Don’t miss out—request a free quote today!
Safeguard your practice: Independent AML Audit
What we do – contact us for further information about our services
- Outsourced COLP and COFA support
- Compliance audits
- New firm and ABS applications
- Independent AML audits (Regulation 21)
- Training (online, remote, on demand)
- AML and GDPR workshops
- PII cost reduction
- Remote file reviews
- TPMAs
- Escrow accounts
- AML and sanctions searches
ICYMI – What the LSB’s damning report means for the future of the SRA…and the solicitors it regulates
Is the SRA facing a reckoning? The LSB’s latest performance report delivers a damning verdict on the regulator’s handling of major scandals like Axiom Ince and SSB Group – just as both the Chair and Chief Executive prepare to step down. Will new leadership bring reform, a crackdown, or more of the same? Our latest blog explores what this all means for the profession, and what to expect next.
ICYMI – AI in your law firm: Stop talking, start doing
Many law firms are still hesitating on AI adoption, but the time for deliberation is over, says Sophie Cisler.
This blog post outlines practical steps for integrating AI into your practice, emphasising the importance of moving beyond discussions to implementation. It highlights how AI can enhance efficiency, reduce costs, and improve client service, while also addressing the risks of inaction. For firms ready to embrace innovation, this is a must-read guide to starting your AI journey.
ICYMI – Checklist: the building blocks of AML compliance
Is your firm missing a vital AML building block?
In this must-read blog, we share a practical checklist to help law firms get AML compliance right – from risk assessments and training to independent audits and policies that actually work. Whether you’re refining your framework or starting from scratch, this is essential reading for MLROs, COLPs, and compliance teams.
