As a busy practitioner, it can be hard to keep up with the latest guidance from the SRA. VinciWorks and Compliance Office are pleased to save you time by bringing you some important updates from the SRA that are important to be aware of.


The SRA has consulted on its 2022/23 Business Plan. This covers their planned activities for the year, how they plan to allocate their budget and what that will mean for the practising certificate fee as well as Compensation Fund contributions. It’s a useful read to get an idea of what’s in store for the coming year.

AML: once again the talk of the quarter

“Digital identity technology has come on leaps and bounds in recent years and if used properly [it] can be a good way of mitigating the risks of money laundering, fraud and identity theft. Technology is an increasingly important tool in the fight against financial crime.”

This is the view of Colette Best, Director of AML at the SRA, in a recent joint statement from Lawtech UK and the Regulatory Response Unit in support of digital identity technology in the legal sector. Remember that the costs of such digital checks can be passed onto your clients as long as this cost is clearly stated in your terms and conditions.

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The Legal Sector Affinity Group (LSAG) guidance has now been approved by HM Treasury, although this comes with some changes to the original guidance issued in 2021. This specific regulation sets out that when judging whether a legal practitioner or practice has committed an offence by not following the regulations, the court must decide whether the guidance has been followed. The LSAG guidance is an invaluable aid to those in the legal sector and has been written in light of changes to the Regulations. While an invaluable aid to those in the legal sector, the complex guidance is over 200 pages long.

What changes were made to the LSAG guidance?

The changes were generally minor, with many simply corrections or formatting changes. One of the more notable changes was updated content around the verification of the identities of beneficial owners. Under the latest guidance, the verification process for beneficial owners is expected to be of the same standard as a natural person. The new guidance also sees a move away from the EU’s high-risk third country list and towards the adoption of the UK’s own list. Lastly, there is some clarification on key terms such as what is deemed “an arrangement” with regards to the Proceeds of Crime Act and additional clarification on the defence of “adequate consideration”.

Core Concepts of the LSAG Guidance – VinciWorks’ Free Guide

VinciWorks has created a concise guide highlighting the core concepts of the LSAG guidance, including practical tips. The guide includes an introduction to the guidance, an overview of risk assessments, what you need to know about Client Due Diligence (CDD), Enhanced Due Diligence (EDD), and Simple Due Diligence (SDD), and how the use of technologies such as Omnitrack can be helpful in carrying out risk assessments, CDD, ongoing monitoring, and ‘just in time’ training.

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Andy Donovan, Managing Director and Founder of Compliance Office
Andy Donovan, Managing Director and Founder of Compliance Office

SRA increased fining powers by more than 10x

The SRA has been granted approval from the government to increase regulatory fines from £2,000 to £25,000. The SRA also plans to introduce a new system of fixed penalties for lower-level breaches, with the goal to reduce the number of cases passed on to the Solicitors Disciplinary Tribunal. The Law Society expressed its concern over the up to 1150% increase in fine limits, as the consultation response agreed to a suggested increase to only £5,000 to £7,000. The MoJ has however agreed with the increase.

What’s been happening in the disciplinary decision world?

Fines, dismissals, mitigating circumstances… 

A former city partner was rebuked by the SRA last month for failing to have sufficient regard for the well-being of a female trainee solicitor and causing her to experience discomfort and distress when a work-related drinks event ended in a visit to a strip club. The trainee’s discomfort at being in the strip club was compounded by the partner placing his hand around her waist on two occasions. She felt unable to challenge his unwanted behaviour because of his seniority and the presence of clients.

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Andy Donovan, Managing Director and Founder of Compliance Office
Andy Donovan, Managing Director and Founder of Compliance Office

On your marks, get set and complete your SRA AML Questionnaire! 

The deadline for completing the mandatory SRA AML survey is 31 July. If your firm does work that falls within the scope of the Anti-Money Laundering Regulations 2017, your COLP should by now have received an email from the SRA asking you to complete a questionnaire. 

All you need to do is follow the instructions provided and complete the survey by their deadline of 31 July. 

The questionnaire itself is fairly straightforward, but here are a few tips to bear in mind:

Insider tips for completing the questionnaire 

Is all your work subject to the Regulations?

On question 1, regarding the option to say whether or not you treat all work as being subject to the Regulations, take care and exercise caution when assuming that all of your work is within scope of the Regulations. It’s not possible to predict with absolute certainty how the SRA will follow up from this point but it seems likely that the SRA may use this question to help them decide whether to follow up with a visit. It would not be a good idea for the SRA’s starting point for a visit to be to “choose to visit all firms that treat all of their work as subject to the Regulations” unless that is strictly what you do, which frankly is unnecessary and depending upon your circumstances, could be disproportionate. Take care to give accurate information.

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Part of VinciWorks’ SRA Compliance Suite: record and track all undertakings in one location 

The VinciWorks’ SRA Compliance Suite is hosted in Omnitrack, a powerful yet flexible data collection and reporting tool. Established use cases in the SRA Compliance suite include a Regulatory Breaches Register, a Conflicts Register, a File Review process and more. The SRA suite also includes the Undertakings Register, a centralised tool to record, review and track all solicitor undertakings, ensuring staff receive reminders to fulfil all obligations which have yet to be discharged.

Before we take a closer look at the Omnitrack Undertaking Register, this blog will recap the definition of solicitors’ undertakings and look at some of the consequences of failing to complete them. 

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As part of a settlement agreement with the SRA, a large SRA regulated firm has been fined £232,500 for money laundering breaches. The firm has also been ordered to pay the SRA investigation costs of £50,000.

Between September 2015 and September 2018 the SRA found that the firm in question carried out serious breaches of the relevant money laundering regulations and the SRA’s rules. These included: 

  1. Failure to retain customer due diligence (CDD) for a minimum period of 5 years: The firm believed that customer due diligence was obtained for certain clients, but the firm did not retain the hard copy file of such documents and no electronic copy of the records was retained.
  1. Not all client documents were obtained: Some documents, but not a full set of CDD documents were obtained in relation to a corporate vehicle. 
  1. Failure to conduct adequate Enhanced Due Diligence, or adequately apply enhanced ongoing monitoring: Certain transactions that the firm carried out presented a “higher risk of money laundering or terrorist financing”, but enhanced customer due diligence (EDD) and ongoing monitoring was not adequately applied.
  1. The firm did not secure full CDD before each relevant transaction took place: The firm secured CDD in relation to the ultimate beneficial owner in a transaction but, because it opened each matter file in the name of a different entity in the corporate structure, the firm did not secure full CDD for each special purpose vehicle before each relevant transaction took place.
  1. No firm-wide risk assessment in place: When the SRA requested a copy of the firm-wide risk assessment the firm did not have a risk assessment in place. The practice-wide risk assessment wasn’t put in place until March 2019, and wasn’t provided to the SRA until May 2019.
  1. AML training was not carried out: A former partner at the firm rhad not received mandatory training as required by anti-money laundering regulations. The absence of training was due to personnel absence but  there was no contingency plan in place for AML training if such personnel absence occurs.
  1. Permitting the client account to be used as a banking facility: The firm accepted four payments in the firm’s client account but they should not have been permitted under the SRA accounts rules.
  1. Confusion with funds being used to discharge the firm’s fees: The firm improperly transfers funds belonging to one entity to the client ledger for another entity, which was then used to discharge the firm’s fees and disbursements in relation to the latter entity.
  1. Failure to send notifications before transferring funds out of a client account: The firm did not send a bill of cost or other written notification to relevant entities before two invoices were raised and paid out of monies held in client accounts.
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What are File Reviews? 

File reviews are a core compliance process for many law firms. They are undertaken periodically, as a way of detecting any compliance deficiencies within a client file. Whilst the precise questions involved will vary from firm to firm, a File Review will usually consider: 

  • General compliance issues, such as whether a conflict of interest search has been undertaken  
  • Cost-related issues, such as whether an estimate was provided to the client and, if so, whether any invoice issued was within that estimate. 
  • General management of the client’s matter, and whether progress has been slower than anticipated
  • Anti-money laundering (AML) risks, including checking that the client’s identity has been verified

Once compliance issues are identified, the File Review process is also a way to ensure those issues are remedied and to document any action taken. 

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The SRA standards are seven principles representing the fundamental rules on ethical behaviour that the SRA expects everyone working in the legal profession to uphold.

The principles must be upheld both inside and outside the work environment. This may also include in your private behaviour, including on social media.

With remote working, less supervision and fewer opportunities for face-to-face training, it’s never been a more important time to make sure your staff are up to speed on the SRA Standards and Regulations.

SRA Standard and Regulations: A Practical Overview covers SRA standards, regulations, and account rules, delivering the information in easily digestible bite size nuggets. The course is designed to be relevant to everyone in a firm, including fee earners, support staff, partners and in-house counsel.

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All Solicitors Regulation Authority (SRA) regulated firms have an obligation to collect, report and publish data about the diversity make-up of their workforce every two years. The next report is due on 2 August 2021. Firms can report their data to the SRA from 5 July.

What information needs to be collected?

  • Employee role
  • Age
  • Employee sex and the gender they identify with
  • Information on any health issues or disabilities
  • Ethnicity and religion
  • Sexual orientation
  • Education and background
  • Childcare responsibilities
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The SRA Standards and Regulations have been in force for 18 months. In that time, firms have had to grapple with new anti-money laundering guidelines, the challenges presented by the COVID-19 pandemic and the changes to accounts rules.

In this webinar, we will be joined by the SRA’s Policy Associates Jatinderpal Loyal and Richard Silver to look back at the last 18 months of SRA compliance and what to look out for going forward.

The webinar will cover:

  • The challenges presented by the pandemic and guidance for firms
  • A recap of the SRA Standards & Regulations and the changes they brought about
  • How solicitors and firms have taken advantage/benefited from the changes
  • How firms have adapted to the less prescriptive Accounts Rules and the key risks identified by the SRA
  • The priorities for the SRA going forward
  • How quality indicators support consumers accessing legal services
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