[1]Barrass: supporting firms’ understanding of our new regime has been a good use of our time
The vast majority of law firms are non-compliant with the Solicitors Code of Conduct, research by the Solicitors Regulation Authority (SRA) has found.
Most of the 200 firms assessed for a baseline study on solicitors’ approach to regulatory compliance had four or five incidences of non-compliance, although in the main they could be remedied relatively easily through changes to client-care procedures and letters, the authority said.
Carried out before the 2011 code came into force, the results of files reviews at the firms were read across to the new code – 90% were found non-compliant with the 2007 code and 80% with the 2011 version. In all, just 19 of the 200 firms were fully compliant with both codes.
Many firms actually recognised that they were not fully compliant; asked to rate their level of compliance on a scale of one to six (six being fully compliant), most said they were either a four or a five.
The main area of non-compliance with the new code was around a failure to provide clients with sufficient costs information, followed by not putting clients in a position to make informed decisions about the services they need, and a failure to notify them about complaints procedures.
Also among the most common breached were the rules on treating clients fairly, and on not discriminating unlawfully, or victimising or harassing anyone.
The report was commissioned to establish a ‘baseline’ set of statistics on the profession’s attitudes – identifying key drivers of compliance and non-compliance – which the SRA will use to help focus its regulatory activities. It will repeat the exercise in 2013.
The research also found that most firms believed they understood the SRA’s regulatory requirements; they recognised that it is beneficial to comply; and that they accept the need for regulation because they wish to be part of a profession that has high standards.
However, they were also fearful of an SRA inspection, although the fear of reputational damage and a denting of professional pride appeared to be of greater significance to firms than the risk of receiving a sanction from the SRA for breaches the rules.
SRA executive director Samantha Barrass said: “This report is a first for us. Its purpose is to help us to understand the likely causes of compliance and non-compliance so we can direct our regulatory resources accordingly.
“For example, the research tells us that an important contributor to ‘unthinking’ non-compliance is a lack of knowledge of our regulatory requirements. This tells us that the effort we have put in to supporting firms’ understanding of our new regime has been a good use of our time and we should maintain this effort.
“The research also highlights two important perceptions. The first is that the SRA is most likely to discover a breach at a firm through a visit, and the second is that firms feel they are not likely to be ‘caught out’ either by consumers or peers. This tells us that visits to firms to examine specific areas of concern is a good use of the SRA’s time, particularly if we can build a good understanding by firms that non-compliance cannot be hidden.”