Samantha Bray examines the regulatory requirements of supervision in law firms.
There are a lot of horror stories that underline the importance of supervision. How about, for starters:
- The partners who were fined for letting a non-lawyer have sole, unsupervised conduct of a group litigation involving 1,500 clients.
- The sole practitioner who failed to supervise his caseworker, incorrectly thinking he was a barrister.
- The partners whose supervision failures resulted in a paralegal stealing £400,00.
Although you may read these and think ‘that will never be me!’, it is vital to ensure you have robust systems in place in the first instance.
What are the requirements?
In its recent Practice Note on Supervision, the Law Society rightly says that “the proper supervision of work is a legal and professional requirement”.
The supervision rules can be found in the SRA’s two codes of conduct. They are similar but, unlike other elements of the conduct rules, do not mirror each other.
The real meat of the requirements are both personal (for the supervisor) and systems obligations (for the firm and its managers).
Rule 3.5 of the Code for Solicitors crept in relatively undetected in 2019. It was in fact an important change to supervisors’ duties:
“Where you supervise or manage others providing legal services:
- you remain accountable for the work carried out through them; and
- you effectively supervise work being done for clients.”
Do the line managers, team leaders and other supervisors in your firm appreciate the scope of this rule? “Accountable” could have an extremely wide interpretation, and the personal liability could come as a shock to some.
But the buck does not just stop with the supervisor. Rule 4.4 of the Code for Firms extends the responsibility to the entire management team (“You have an effective system for supervising clients’ matters”).
Or to put it another way, the firm has to put in place the controls whilst the individual supervisor is responsible for properly doing the supervision.
We could debate the use of the word “effective” here. Does it mean that whenever there is a supervision failure, the system itself is automatically ineffective? The nature of principles based regulation is that rules can be interpreted widely dependent on the facts of each case. Where there is a serious supervision failure leading to client detriment, the SRA would be expected to invoke the firm’s obligations.
Note that Lexcel-accredited firms will have some additional supervision requirements.
Training your supervisors
Although the SRA does not explicitly oblige firms to train supervisors, it would be reasonable to assume that failure to do so would contribute to whether the supervision system is effective.
Solicitors of a certain age will remember the old Management Stage 1 & 2 course, which was mandatory after joining the profession. But that requirement was dropped in the latest versions of the SRA rules.
The Lexcel standard does however retain a supervisor training requirement, and it would seem reasonable for most firms to replace the Management course with something similar.
Who supervises the supervisor?
Any effective supervision system will involve oversight of the supervisors’ work, to make sure they are following the policy and procedures.
The COLP, being the internal compliance police (sorry, but you are), is the natural person to carry this oversight role. Supervision policies often make this explicit. What that oversight looks like in practice, takes some thinking about.
You will certainly want to be confident that supervisors are following your policies and any compliance risks are being filtered through to the COLP.
And let’s not forget that some form of working from home is now the norm for many people. So, you must ensure your supervision policy covers this. How are you able to supervise your team from afar?
Some things for supervisors to think about:
- Do you have a regular ‘check-in’ meetings with staff?
- Does there need to be an element of in-person supervision?
- Has sufficient time and resource (IT platforms, for example) been allocated to supervising the team
- Does your risk register need to be updated to reflect new working arrangements?
10 tips for effective supervision in law firms
- The first tip has to be – make sure that you have a proper supervision policy in place. Is it up to date with all your departmental supervisors? Is it easily accessible for staff to see? Is it clear and concise?
- It follows that the second tip is to make sure that your supervision policy is followed. We are not only taking about supervisors here, but everyone should also know and follow the policy.
- Follow-up! Follow-up! Follow-up!When we conduct file reviews we often come across instances where the fee earner has failed to take action recommended by the supervisor, and this has gone un-noticed as the supervisor has not followed up. This could be a worse failure than not spotting the issue in the first place!
- Remember that supervision has numerous benefits– it is key for personal development. Effective managers can boost team morale, culture and job satisfaction as well as increase the quality and efficiency of work. Supervisors are an important line in the defence against general risk and compliance issues.
- Feedback– Ensure supervisors give regular feedback (both positive and negative) to those they are supervising. Consider training for your supervisors on how to give feedback.
- Supervisors should receive regular reviews of their own, this should particularly be the case where supervisors are not part of the senior management team.
- Make sure your supervisors have adequate time for supervision duties. If they do not, not only are those duties more likely to be pushed to the bottom of the pile, but also those they supervise are less likely to approach them with a question or problem. We’ve seen many cases go to the SDT where relatively junior solicitors have tried to hide their problems and have felt unable to approach their managers.
- Encourage your supervisors to have an open-door policy(and yes you can still have the policy if you work in an open-plan office) where junior staff can feel comfortable to approach them, even if they think they have made a mistake.
- Encourage your supervisors to share experiencesand ideas with each other. Perhaps they can swap duties for a day? A fresh pair of eyes and all that!
- Provide supervisors with training in supervision and management – a good solicitor does not always equal a good supervisor.