JLT Specialty hosted an Ethics Training roundtable with Kingsley Napley LLP to discuss the recently published the Solicitors Regulation Authority’s Standards and Regulations 2019 (“STARs”) and its likely impact on the legal market as well as how best to deal with a serious incident that may need to be reported to the Solicitors Regulation Authority (SRA). The two key reforms highlighted in the STARs below raise questions as to whether these reforms provide an opportunity, or pose challenges, to law firms:
1. Solicitors will now be able to practise as solicitors in unauthorised firms, as long as they do not provide reserved legal activities;
2. Freelance solicitors will be able to provide reserved legal activities and other services to clients as long as they are not provided through an intermediary company and they do not employ anyone.
The discussions that followed were based on a ‘real life’ scenario on how firms should deal with a potential regulatory breach. The session provided an opportunity for COLPs and risk managers to have an open discussion as to how they address these issues within their firms and how they may need to adapt practices to meet the changing landscape.
The key takeaways are:
1. Preparation is key.
2. Firms need to think about whether they have done enough to prevent an incident in the first place. If something goes wrong the SRA will ask what they have done. This would include:
- Up to date policies
- Having processes in place to deal with issues which enable resilient governance and decision making processes.
As well as processes, Firms need to look at culture. Do the behaviours of partners and others set the right tone? Do they need senior people within the organisation to champion appropriate and ethical behaviour.
3. Put in place a plan that can be implemented should a serious issue arise. There are many complex and overlapping issues which need to be thought about in a very short period of time. Designate a team in advance. Discuss and record the types of issues that may arise so that the team is familiar with them. Make a checklist and put together contact details of potential advisers, insurers and others who may need to be notified.
Make sure that there is a mutual understanding between the risk management and the HR team as to the need to communicate on issues which might impact both areas.
For further information please contact Martin Ellis, Head of UK Professions and Legal Practices Group on +44 (0)20 3394 0489