SRA reviews and law firm visits: Will your firm be under the spotlight in 2022?

What is an SRA Review?

An SRA Review is a Thematic Review programme and a tool used by highly regulated sectors, such as the legal profession, to manage consumer risk. The Solicitors Regulation Authority (SRA) regularly conducts thematic reviews which involve in-depth analysis of themes that have raised concern or interest. Thematic Reviews are designed to assess risk, check compliance, and address unfair consumer treatment of vulnerable segments. Thematic reviews seek to identify and understand good and bad practice, increase accountability and encourage best practice. 

How confident are you in terms of compliance?

As a leading supplier of legal software and compliance tools to the legal profession, Access Legal run regular webinars for law firms condensing and presenting important information regarding compliance and practice management. In our webinar on ‘SRA Thematic Reviews: are you going to be under focus?’ I join Senior Risk and Compliance Associate, Rhiannon Davies to discuss a poll that asked, “How confident are you that your firm is doing all it needs to do in terms of compliance?”.

The results showed a mixed picture. Although 67% indicated they were confident, 10.5% were not sure, and 22% were not confident. With a third being unsure or not confident, it’s clear the possibility of an SRA Thematic Review visit is something keeping a significant number of law firm owners/leaders up at night.

What kind of SRA review themes have we seen in the past, and can expect in the near future?

What we have seen so far:

• 2019 – residential conveyancing – 40 firms visited
  
  
• 2019 – transparency – 500 firms’ websites reviewed
  
  
• 2019 – competency – 20 firms visited
  
  
• 2019 – AML practice wide risk assessments – 6,500 firms sent questionnaires
  
  
• 2020 – cybersecurity – 40 firms visited
  
  
• 2020 – AML – 400 questionnaires sent and 74 firms visited
  
  
• 2021 – AML – 50 firms visited
  
  
• 2021 – SRA Standards & Regulations – 3,000 solicitors surveyed

Check out the key themes of the 2021 SRA thematic review. 

Likely thematic SRA reviews for 2022

• 2022 - Workplace culture the benefits of a positive culture law firms, as well as the risks of toxicity
  
  
• 2022 - Immigration – competence and quality of service
  
  
• 2022 - Supervision – how it works in practice, to inform new guidance
  
  
• 2022 - Powers of attorney/deputyship in light of concern about the treatment of vulnerable segments
  
  
• 2022 - Mental health law – in terms of high risk/vulnerable clients
  
  
• 2022- Legal ombudsmen service complaints
  
  
• 2022 - Due to recent world events a review of sanctions compliance has recently commenced
  
  
• 2022 - Anti-Money Laundering will continue to remain under the spotlight too

We run webinars for law firms regularly and recordings are always made available to law firm executives. There was a compliance panel discussion in October 2021 when I (Brian Rogers, Regulatory Director for Access Legal) was joined by panel members from law firms, the Solicitors Regulation Authority (SRA) and the Legal Services Board (LSB). During this event, although it wasn’t fully nailed down at the time, the SRA told our audience what was likely to be next on the horizon for Thematic Reviews. 

SRA law firm visit observations

We work with many law firms before, during and after their interactions with the SRA. Some come to us in anticipation of a visit, those who are expecting an interaction and often after conversations with the regulator. We would like to take this opportunity to share with you some of the key learnings we have observed: 

• Practice/firm wide risk assessments – not updated to take account of issues like Brexit, Covid-19, sanctions, etc., or made notes that a review has taken place even where nothing has changed; if it isn’t noted, it didn’t happen!
  
  
• Policies and procedures – in place but not being followed
  
  
• Source of funds/wealth checks – thinking they are the same thing, and not making notes of findings, etc.
  
  
• Training – staff not being given training in line with the competency requirements in the SRA Codes of Conduct
  
  
• Tax advice – firms not considering whether they now meet the ‘tax adviser’ definition, and are therefore covered by the Money Laundering Regulations

SRA Enforcement

We have seen a number of firms sanctioned as a consequence of being found in breach during thematic reviews, including:

• Firms being fined £800 each for delays in responding to practice wide risk assessment declarations
  
  
• Firms being fined between £1,000-£2,000 for failing to publish price and service information on their websites
  
  
• Firms being rebuked for various transparency breaches

Steps law firms can take to ensure standards high and in readiness for thematic reviews

• Ensure your compliance culture is fit for purpose, top to bottom
  
  
• Review and update your current policies, controls and procedures (PCPs) in all areas
  
  
• Provide staff with regular training
  
  
• Keep notes of your decisions/actions
  
  
• Ensure your legal practice management software is aligned, configured and assisting your firm with its compliance challenges.

The 2022 SRA Review in conclusion

It is a fact of law firm life that the legal profession is one of the most highly regulated sectors of all, and for good reason. If your firm hasn’t been touched by the regulator yet, chances are you will be in the near future. Although an SRA Thematic Review visit is not guaranteed in 2022 or 2023, law firms can and should prepare now for this eventuality. As the saying goes, “ The best preparation for tomorrow is doing your best today.”