Compliance or not compliance, that is the question!
Through our recent blog series, we have been looking at the link between the SRA Standards & Regulations and key areas of law firm management - specifically, risk management, risk-based file audits, complaint management, and breach management. Read on to discover, the answers to the key questions our webinar attendees asked!
Over 600 people registered for the four webinars, which covered:
- Risk management
- Risk-based file audits
- Complaint management
- Breach management
At the end of each webinar attendees were able to ask burning questions they had, and we thought you might find it of interest to know what some of these were:
Question 1
“Much of what the SRA say is, “it’s up to you how you comply”, yet it publishes templates; you say use them, so how is it best to proceed?”
Answer - The SRA does give firms the flexibility to comply as they see fit as long as it is in line with the SRA Standards & Regulations, however, it also provides guidance and templates to assist firms in doing this; it will remain for firms to decide how to comply, but if the SRA provides resources to aid compliance it would make sense to use them as this would reduce the risks of being found to be non-compliant in the future.
Question 2
“Where can I find information about the font requirements you mentioned for the LeO?”
Answer – Various regulatory bodies (Legal Ombudsman, Legal Services Board, Solicitors Regulation Authority, Legal Services Consumer Panel) have made their views known on the use of small print in hardcopy client communications, with them saying that they would find poor service if firms used small fonts; at a conference where client care letter research was discussed the fonts they expected to be used ranged from Font 10 (LeO) – Font 12 (LSCP). The SRA has said that you should use a “large and clear font size”. In essence, any communication you send to clients should take account of their individual needs, including whether they require larger fonts so they can read the contents.
Question 3
“There is the leaky bucket and the cost of non-compliance; is there any information as to the cost of compliance?”
Answer – This question related to what we described as the “leaky bucket syndrome”, where firms are so focused on generating fees to go into their fee bucket that they forget to look at the fees that then leak from their bucket due to non-compliance (complaints, claims, breaches, etc.). Costs relating to compliance can vary significantly from one firm to another, and will depend on size, work areas, the approach they take to compliance, etc., so it is difficult to provide an exact figure. The key is to cover compliance costs as a separate item in your financial plans and monitor the costs related to non-compliance. The questioner was wondering whether they could reduce their six-figure compliance costs; we are now in discussions with them over how we can help them with this using our compliance services.
Question 4
“In relation to the “rule of 2”, would this apply to terms of business?”
Answer – This question related to what we advise in terms of being seen to be taking reasonable steps to get clients to sign and return client care letters. The “rule of 2” relates to how many times you should ask a client to return a signed letter before you can take it that their continued instructions can be taken as their agreement to everything contained in the client care letters; this also applies to terms of business.
Question 5
“Do you have any particular views on handling non-client complaints?”
Answer – Although you normally only have obligations to deal with client complaints (including beneficiaries) it is good practice to deal with all complaints in a professional manner; this does not mean you need to invoke your internal complaints procedure. Any complaint could potentially lead to damage to your reputation so taking a pragmatic approach is worthwhile; if the complaint comes from the opposite party to your client you will need to be careful that you do not breach confidentiality or create a conflict.
Question 6
“How do you deal with second-hand reports, for example, A says B has done X?”
Answer – You have a duty to report promptly to the SRA any facts or matters that you reasonably believe are capable of amounting to a serious breach, or any facts or matters that you reasonably believe should be brought to its attention in order that it may investigate whether a serious breach has occurred; it also says that if in doubt you should report.
Question 7
“Is it reasonable for COLP/COFAs to report to partners’ meetings before the SRA?”
The short answer is no; compliance officers have duties to report in line with their obligations under the Standards & Regulations for Firms (9.1(d) and 9.2 (b)). Compliance officers can communicate with partners as they see fit, but it is for them as individuals to make decisions about reporting promptly to the SRA. When compliance officers were nominated by their firms for the roles, and they accepted the appointments, it was on the basis that they understood their obligations and that their partner colleagues did as well, and that reporting would be made without the need for discussion with or consent from fellow partners.
We regularly get questions like the ones above during our monthly compliance update webinars and provide our thoughts on them; if you are not already registered for these why not join us and find out what is current in the field of legal compliance!
