Becoming a partner is still an important career milestone for many lawyers. But as we all know, not all partners are created equally.
Some are true equity owners and managers. Others have the title, but carry little influence or real upside in the business.
The regulatory responsibility of the ‘partner’ title is often overlooked when senior associates make that step up. Yet those ‘junior’ partners are likely to be just as responsible for their firm’s regulatory compliance.
As well as individuals, the SRA also regulates ‘entities’ – which is essentially shorthand for law firms. The people primarily responsible for a firm’s regulatory compliance are its ‘managers’ rather than owners.
Managers are defined by the SRA as:
- the sole principal in a recognised sole practice;
- a member of a LLP;
- a director of a company;
- a partner in a partnership; or
- in relation to any other body, a member of its governing body
That will cover most salaried partners.
For those who are described as partners, but who are not in fact a partner, may also be on slightly shaky ground. ‘Holding out’ may bring additional considerations.
But aren’t the COLP and COFA the compliance officers?
Well, yes. These lucky soles are singled out for special attention, have specific responsibilities and are expected to be the focal point for regulatory compliance.
That, however, does not relieve the rest of the firm’s ‘managers’ of their regulatory liabilities. Which of course makes sense. Otherwise the COLP and COFA would risk becoming sacrificial lambs and nobody would consent to doing the job.
Now this isn’t intended to dampen anyone’s excitement for being made up to salaried partner. But you should accept that promotion with your eyes wide open. Make sure that all partners have full visibility of compliance issues and have enough influence to recommend changes.
If there is something rotten going on, turning a blind eye or relying on ‘junior partner’ status may not be an effective defence.