This newsletter is brought to you by the team of SRA compliance consultants at Jonathon Bray.
Did you know…? You Have To Screen Your Employees For AML Compliance? Here’s How
AML compliance posts are coming thick and fast.
Is your firm caught by the Money Laundering Regulations? About three quarters of law firms are. Either because they provide a regulated service (e.g. property or other transactional work) or fall into the sneaky definition of ‘tax adviser’ or ‘trust and company service provider’.
(If you don’t know whether you are caught, you absolutely must check – close this page and do it now!)
If the answer is yes, then you have to screen your employees before they start working for you and on an ongoing basis.
An AML compliance blind spot
If this employee screening duty is news to you, believe me when I say you are not alone.
A recurring theme in our Regulation 21 AML audits is that most firms are in the same boat. They are either completely unaware of the rule or they only undertake screening as part of pre-employment checks. Ongoing screening catches most firms out.
Our Performance Was “Supercharged” By Employee Ownership, Says Award-Winning Law Firm
A market-leading incentives law firm credits its recent conversion to Employee Ownership Trust (EOT) as a key driver to its outstanding team culture and financial performance.
“I Can’t recommend EOTs enough”
Winner of this year’s Boutique Law Firm of the Year at the Legal Business Awards, Tapestry Compliance converted to employee ownership shortly before the pandemic. Despite difficult trading conditions, the firm has gone on to achieve impressive financial results.
Speaking at a Jonathon Bray webinar on law firm succession, Director Chris Fallon said that the EOT conversion “supercharged the team”, with collective engagement and sense of ownership significantly increased. “Everyone is happy and enthused”, he said.
EOT experts Gerry Young and Tom Lethaby of RVE Corporate Finance spoke in detail about the process of converting to EOT, the qualifying criteria, deal structure, and role of the trustees.
See below for free access to the recording
News and Guidance
Law Society Updates
- Society ponders SDT support for lawyers (Gazette) – Defence costs bundled into membership, anyone?
- Practice note: File closure management
SRA Updates
- SRA Compliance Conference 2021 – now open for registration
- Practising certificate renewals now open – deadline extended to 11 November at 13:00
- Our anti-money laundering work – In the period to March 2021, the SRA visited 85 firms, conducted over 150 desk-based reviews, made 39 suspicious activity reports, and issued £160,000 of fines related to AML breaches.
- SRA Chair Anna Bradley said the “overwhelming majority want to do the right thing, but there is still a small but nonetheless significant proportion of firms that are just not doing enough to prevent money laundering. As well as allowing criminals to profit from their actions, they undermine the trust consumers place in the profession, damaging confidence in the rule of law and the administration of justice.”
- There is no let up in sight for law firms. The regulator will increase the number of AML visits and reviews over the coming year.
- Interested in unbundled services? Get involved in our pilot – The SRA is encouraging firms to consider offering ‘unbundled’ services (i.e. not a full end-to-end service), in a bid to improve access to legal advice.
Other Updates
Webinars
A huge thank you to Tom Lethaby, Gerry Young (both of RVE Corporate Finance) and Chris Fallon (of Tapestry Compliance, an award-winning boutique law firm). They joined Rachael Eyre to talk about the Employee Ownership Trusts (EOTs) and their role in law firm succession planning.
It was a fascinating discussion, with some of the main points picked up in our write-up (see above).
Access the recording (Passcode v=Y*yNH0). The recording will be available for 28 days.
Disciplinary decisions
- Femida Jamali – struck off for dishonestly misleading clients about the status of their claims.
- Benjamin Achogbuo – rebuked following drink driving conviction
- AKL Solicitors Ltd – fined £1,200 for failing to comply with the SRA Transparency Rules (lack price and service information on its website).
- Irwin Mitchell LLP – fined £9,000 for failing to give proper advice to clients when switching them from legal aid to CFAs.
- Lauren Gibb – paralegal ‘struck off’ (section 43 Order) for falsifying time records for calls not actually made. This is the second similar finding at the same firm, which would suggest something about culture and systems.
- Patrick and Margaret Hetherington – struck off for acting in a dubious investment scheme involving parking spaces. Several clients lost substantial sums in the scheme.
- Stenfield Limited (a firm) – rebuked for accepting referrals from a third party where the clients had been cold-called.
- Rajinder Sambi – rebuked for failing to register a property at the Land Registry.
