Lockdown: Top Ten Compliance Activities – by Jayne Willetts

I am writing this column as we begin week 4 of the lockdown. My sincerest wish is that, by the time you read this, the advice will be redundant and that we will be out of lockdown and back to normal operations. If not, here are 10 suggestions for compliance activities during the lockdown.

1. Law Society guidance
The Law Society has been showering us almost daily with high quality and practical advice and guidance. We are reminded that the Society is staffed by many qualified solicitors and that it has access via its specialist committees to a vast repository of knowledge and experience. Make sure that you are signed up to all the email updates, review them and email your own staff with those of particular relevance to their practice area.


2. Office manuals & procedures
The lockdown may create the opportunity to check your office manual and update references to the 2011 Handbook. Firms have been so busy since the new SRA Standards & Regulations were introduced on 25 November 2019 that they may not have had time for this tedious but essential task. Whilst business is slower, it might be the ideal time for COLPs/COFAs and office managers to comb through their compliance documents. Don’t forget to reflect the SRA guidance notes in the manual as well as the Standards & Regulations.

3. Contact with employees
Keep in touch with your staff who are working from home by regular meetings scheduled in the diary via video link or by telephone. Human contact is important both to avoid staff feeling isolated and lonely but also to avoid staff soldiering on with work without supervision or discussion with peers. It can lead to mistakes and possible negligence claims or even allegations of misconduct. Although not physically in the office, try and create a feeling of togetherness. Some firms have business meetings online and also social meetings online such as coffee and cake or even a quiz – whatever it takes to keep in touch.

4. Social media
With more time on our hands, the use of social media has increased exponentially during the lockdown. Now may be the time to remind staff of your social media policy and the fact that the SRA can take action even if posting in a personal capacity. The media has reported upon a law firm dismissing a left leaning paralegal who posted unpleasant comments about the Prime Minister “deserving” his recent illness. Staff need to be reminded that care and restraint are the watchwords when posting on social media platforms.

5. SRA reporting obligations
Although The Cube is closed, the SRA continues to operate remotely and the obligation to report concerns to the SRA has not disappeared although the need to report “promptly” may be relaxed. The most likely concern during lockdown is the duty to report financial difficulty (Rule 3.6 Code for Firms). COLPs should carefully consider when and how to report and if in doubt seek specialist external advice. Above all, the approach and decisions taken must be documented.

6. Accounts Rules compliance
As well as agonising over the financial stability of the firm, the COFA should be maintaining a close watch on the bookkeeping function of the firm to avoid Accounts Rules breaches. Now is the time to make sure the COFA understands how the firm’s accounting software works and can operate it if the cashier is away from the firm. There has been a myriad of cases before the SDT over the years where Accounts Rules breaches have occurred because the bookkeeper has been off due to illness and no-one else in the firm has the faintest idea about what to do in their absence. Very regular reconciliations of both client and office accounts provide a simple and effective method of checking on compliance in this area.

7. Client confidentiality
For some working at home means a separate study which can be converted into an office. For others it may mean working on the kitchen table. In either case the requirement for client confidentiality needs to be impressed upon staff. Laptops and any client documents need to be secured. Laptops must be locked when unattended, even if only whilst making a cup of tea. Phone calls and online meetings must be held where they cannot be overheard. Bored children may find it amusing to share sensitive client information with their friends!

8. AML
The SRA continues with its audits of firms’ AML procedures and policies even during the lockdown and are requesting copy documents to be provided by email from some firms. The most likely request will be for you to send in your revised AML risk assessment form, so review this now in the light of the advice provided by the SRA as to what they will expect to be in place. You should also consider updating your policy if you are subject to the Money Laundering Regulations in the light of the amendments required by the Amendment Regulations which took effect on 10 January 2020. On both issues see the AML section of the SRA website – https://www.sra.org.uk/home/hot-topics/anti-money-laundering).

9. SRA guidance
Although not as frequent and as extensive as the Law Society guidance, it is worth checking the SRA’s common compliance queries arising from the lockdown. Subjects such as delay in delivering your accountants’ report and loss of key role holders such as MLRO are covered at https://www.sra.org.uk/sra/news/coronavirus-qa

10. Looking to the future
The lockdown although unwelcome and frightening provides an ideal opportunity to step off the hamster wheel and think about the future. Firms should review the structure of their businesses. Pause and think about whether you need the overheads of office accommodation and branch offices; non-fee earning staff and less profitable work. We may learn something positive from this crisis after all to help us with the future prosperity of our businesses but in the meantime stay safe.

Jayne Willetts
Solicitor Advocate