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, and the next collection date 2 August 2021.
What is the source of the reporting requirement?
The SRA Code of Conduct for Firms in SRA Principle 6 states that a firm must “act in a way that encourages equality, diversity and inclusion”. The SRA believes that monitoring the diversity of people working in your firm will help you assess whether your firm is diverse and whether you could do more to encourage equality, diversity and inclusion.
In November 2016, the Solicitors Regulation Authority (SRA) abandoned its 16 hour minimum training requirement in favour of solicitors declaring themselves to be competent. At the time, mixed feelings were expressed by solicitors, including: “Will less training be carried out if there is no minimum requirement? How will I know what training to do? How should I record the activities I take part in and maintain an accurate learning record? What do I need to do in order to declare myself competent to the SRA?”. Consumers and those who protect them asked: “How can I know that the solicitor I select is well trained and competent to do the work that I require them to do? Will they do the best job possible for me?”.
On 25 November 2019, the changes to the SRA Handbook, now known as the SRA Standards and Regulations, came into force. To help solicitors understand their requirements under the reforms, our Director of Best Practice Gary Yantin was joined by the SRA’s Policy Associate Jatinderpal Loyal to answer our audience’s questions.
Here are some of the questions answered by Jatinderpal during the webinar:
Do the new Principles and Code apply to unqualified employees?
What are the key changes to the conflicts and confidentiality provisions in the new Code of Conduct(s)?
How should firms stay updated on the STaRs?
Will there be an increase in reports to the SRA?
Does a notification to the firm’s insurer automatically warrant reporting to the SRA?
Why has the principle to “act honestly and with integrity” been separated into two principles?
The SRA Handbook was replaced by the SRA Standards and Regulations on 25 November 2019. The SRA has worked closely with the profession and the public to develop their proposals over the last four years, engaging with more than 35,000 people. The changes are set to modernise both SRA regulation and the legal market.
The key changes to the SRA Handbook to be aware of:
Reduction in number of principles – Where the previous Handbook contained 10 Principles with accompanying notes, the SRA Standards and Regulations are constructed around seven principles that apply outside as well as inside practices. The principle to act in the best interest of the client has not changed, but a new principle of honesty has been added. The onus is now on you to interpret the Principles and use your better judgement as opposed to rigidly interpreting a narrow set of examples.
Separate, Shortened Codes of Conduct – The previous Code of Conduct was too long, confusing and complicated, blurring the lines between individual and entity responsibilities. Therefore, it has been replaced with one Code of Conduct for individuals, and a separate Code of Conduct for firms. This will also make it easier for consumers to understand. The separate codes will also ensure a clear distinction between the expectations of individuals and those of the expectations of firms. The indicative behaviours which appeared in previous codes have been removed.
Simplified Accounts Rules – The Accounts Rules introduced by the SRA Standards and Regulations have been simplified and contain a different definition of client money. They also include rules on the use of third-party managed accounts. The Accounts Rules are less prescriptive than previous rules which were overly complex; they focus on the key objective of safeguarding client money. Firms are still required to keep client money separate from firm money and ensure client money is only used for its intended purposes.
Changes to the Insurance Distribution Directive – There is a new explicit requirement that all insurance contracts proposed must be consistent with the client’s demands and needs. Furthermore, if you advise on a certain product then you must provide a personalised recommendation explaining how the product recommended best meets the client’s needs.
The SRA Handbook is being replaced by the SRA Standards and Regulations, which will be in force from November 2019.
To help firms prepare for the new regulations, VinciWorks has released a suite of SRA Standards and Regulations courses. The courses dynamically create a personalised learning experience based on an individual’s role in a law firm. This ensures everyone taking the course will learn what they need to know, and not waste time reviewing areas irrelevant to their practice.
The new focus of the SRA Standards and Regulations is on each legal professional being able to justify their actions in all work that they carry out. For many legal professionals, including partners, managers, solicitors and support staff, this will require a significant change in approach. Legal professionals often only consider their professional obligations when a conflict of interest arises. However, the new SRA Standards and Regulations emphasise that legal professionals must be able to demonstrate compliance at all times.
The courses will help legal professionals, including support staff, to develop an understanding of the relevant SRA regulations which apply to their specific role in the law firm. The training ensures that all employees of an SRA regulated law firm who have a legal obligation to follow the SRA Standards and Regulations have sufficient knowledge to stay compliant.
On 25 November 2019, the new SRA Standards and Regulations come into effect. These will replace the current SRA Handbook. Over the last two years, VinciWorks has consulted with the SRA and many law firms in England and Wales to provide guidance and training on the new Standards and Regulations.
In this webinar, we were joined by the SRA’s Policy Associate Jatinderpal Loyal to examine the key changes under the new Standards and Regulations. Jatinderpal also gave guidance on how firms can comply with the new Standards and regulations.
The webinar covered:
The key changes to the SRA Handbook
The challenges in creating the new Standards and Regulations
Guidance on ensuring SRA compliance for the entire firm
Ahead of the 25 November release of their new Standards and Regulations, the SRA has published a suite of guidance and support materials, designed to help you better understand any areas of significant change compared to our existing rules or areas of new opportunities.
On 25 November 2019, the new SRA Standards and Regulations come into effect. Replacing the SRA Handbook, the SRA Standards and Regulations stipulate the behaviours, standards and requirements expected by solicitors and other SRA regulated people.
VinciWorks has produced a whitepaper that outlines what the new Standards and Regulations will include and the challenges it presents to firms.
The whitepaper covers:
Key differences between the SRA Code of Conduct and the new SRA Standards and Regulations
The requirements of the Insurance Distribution Directive
VinciWorks’ SRA Standards and Regulations training suite
The relationship between training and continuing competence
The Legal Services Board (LSB) has granted all the amendments to the Standards and Regulations proposed by the Solicitor’s Regulation Authority (SRA). The new set of rules which will replace the current SRA Handbook are set to come into force on 25 November 2019.
The main changes to the previous draft Standards and Regulations concern the expectations of a COLP or COFA when disclosing a serious breach in a law firm. The changes mean that the ability to report a breach will be much earlier than currently set out in the SRA Handbook.
The SRA announced on 20 March 2019 that it is launching a crackdown against firms who fall foul of money laundering procedures. The regulator will initially write to a sample of 400 firms asking them to demonstrate compliance with the Money Laundering Regulations 2017. The SRA will be checking that firms have a money laundering risk assessment and implementation plan in place.
Failure to get to grips with the risk-based regime leaves firms vulnerable to money launderers and an easy target for criminals and terrorists trying to launder dirty money. While compliance can be a challenge, SRA chief executive Paul Philip says “compliance is not optional”. SRA Chief Executive Paul Philip said that his organisation is taking a robust approach to AML enforcement claiming that firms can be wittingly or unwittingly involved in crimes of money laundering and he expects firms to be vigilant in complying with the law.
Anti-money laundering risk assessment for law firms
VinciWorks has created a risk assessment that will help solicitors gain a clear understanding of whether they have the policies and procedures needed to ensure AML compliance.
