This is our first COLP Insider following our summer break.
I hope that you have had some time to rest and relax.
The theme for this week is the importance of keeping up to date with the latest guidance from our wonderful regulators. They have clearly been busy bees over the summer, producing all manner of guidance to the new SRA rule book (so far I have resisted calling it STARs, somebody slap me if I slip).
As we know, the rules are changing on 25 November 2019. No doubt you will have started getting bombarded by webinar and course invitations – times of regulatory change are always the best sales opportunity.
There is still plenty of time to get to grips with the new rules – it will take you 20 minutes to read them. The guidance, however, is something else. The devil is in the detail. We were told that there was going to be no detail. But it turns out, there is quite a lot.
And of course, as I have been boring people with for a long time, the guidance is not subject to any oversight or consultation requirements. It can change on a whim.
It seems to me that there was a real opportunity for the SRA to fully embrace principles-based regulation. It is not a popular regulatory model with everyone, but brevity it has its benefits. But in order to get the benefits, you have to commit to it. Unfortunately, the SRA couldn’t help themselves, and what we seem to have ended up with is the worst of both worlds: a stripped back rule book but with potentially open-ended and ever-changing guidance which is not subject to consultation.
Even if it’s not mandatory, who is going to knowingly go against the regulator’s guidance on unfamiliar and stripped-back rules?
I fear the guidance itself will become the rules.
On the plus side, some great opportunities in the new rules for those brave enough to become freelance solicitors, and for firms to hive off non-reserved legal services into unregulated businesses. Although The Law Society is doing its best to discourage us all from going down that road.
Have a great weekend – the weather looks promising.
P.S. It’s Friday – if you are in a good mood, please consider sponsoring us for the Cardiff Legal Walk in aid of The Access to Justice Foundation. We only need £250 to reach our target.
SRA starts to roll out new guidance
If you have not yet familiarised yourself with the new rules, this is the place to start. By way of reminder, the main changes are going to be:
- New SRA Principles, applicable to all staff
- New Code of Conduct for individual solicitors – applicable in whatever capacity they practise (employed, consultant, freelance etc.)
- New Code of Conduct for firms – applies to the entity plus its management. Similar to the individual code.
- New Accounts Rules – applies to all firms holding client money. Reform of the rules is long overdue, but there are some fairly significant changes that you should be aware of.
What should the COLP and COFA be doing to prepare for the rule changes?
- Familiarise yourself with the new rules and guidance.
- Undertake a gap analysis – where does action need to be taken?
- Educate the Partners/Directors. Get them on board with your action plan.
- Train your staff on the new rules, highlighting the move back towards professional ethics and personal conduct.
- Keep a copy of the current rules and guidance – just in case.
New guidance materials
- Third party managed accounts
- Planning for and completing an accountant’s report
- Joint accounts and record keeping
- Helping you keep accurate client accounting records
- Do I need to operate a client account?
- Accountant’s report and the exemption to obtain one
- When do I need a practising certificate?
- Preparing to become a sole practitioner or SRA-regulated freelance solicitor
- Does my business need to be authorised?
- Can my business be authorised?
- Firm authorisation
- Guidance to the SRA’s approach to equality, diversity and inclusion
- Unregulated organisations – for employers of SRA-regulated lawyers
- Unregulated organisations – giving information to clients
- Unregulated organisations – conflict and confidentiality
- Not for profit sector
- Registered Foreign Lawyers
- Acting with integrity
- Client care letters
- Adequate and appropriate indemnity insurance
Law Society guidance for freelance and ‘unregulated’ solicitors
Why it matters
- You will still have obligations under the Code for Individuals, including conflicts, confidentiality and information to clients.
- There is a possibility that your professional ethical duties will conflict with your unregulated employer.
- Whether privilege applies in the unregulated sector is yet unclear.
- Client money handled by an unregulated business may not be as well protected as in a solicitor’s firm
- NQs will be able to practise in unregulated firms
- Freelance solicitors will not be able to employ anyone or operate through a limited company
- Freelance solicitors will not be permitted to hold client money
- There are serious insurance considerations for freelance solicitors (and your personal assets may be at risk)
- There “may initially be some scepticism and reputational implications” about the freelance model, and it may affect “long-term career plans and wider aspirations”. Ouch.
Updated ICO guidance – Subject access requests
The main change is the timetable for responding to subject access requests. It is now the case that the one month clock starts ticking from the day the request is received, not the following day. That directly affects the deadline for responding.
In other data protection news…
Although this is a Greek case, it should be a warning shot to all UK businesses since we are subject to the same regulations. We need to make sure that we:
- Identify all classes of personal data (e.g. clients, employees, third parties), on a granular level
- Properly address the lawful basis for processing that data
- Inform data subjects of their rights and how we use their data
- Eliot Lopian struck off in an agreed outcome for forging signatures in title transfer forms in order to cover up mistakes
- David Marriott struck off following a conviction for sexually assaulting two paramedics whilst drunk
- Jonathan Leslie Horner struck off for preying on vulnerable clients, enriching himself over several years by inserting himself into clients’ wills, including one legacy of £100k
- Harmail Gill fined £10,000 for failing to send accountant reports to the SRA, because he didn’t know he was supposed to do so
Looking for a new challenge?
We can help.