Attendees at the first of a series of roadshows have been learning of the potential perils of the major regulatory changes that are on the way for solicitors, and which will radically affect the way they run their businesses.
The events, which are taking place in seven regional locations throughout January and February, have been organised jointly by SIFA, the provider of legal and financial compliance services, and 360 Legal Group, which provides consultancy, business advice, management support and membership services to thousands of solicitors. Both are Legal Futures Associates.
The arrival of outcomes-focused regulation (OFR) includes the requirement that all law firms must appoint a compliance officer for legal practice (COLP) and a compliance officer for finance and administration (COFA).
The first of the OFR roadshows – held in London on 17 January – highlighted the onerous responsibilities imposed on firms’ management and in particular their compliance officers. In the words of one of the presenters: “Who would actually want this job when the potential penalties are so high?”
Says Viv Williams, chief executive of 360 Legal Group: “The new responsibilities will demand a complete sea change in the way that solicitors are currently running their businesses. And they have very little time to be in a position to demonstrate to the SRA that they are complying.
“Talking directly to the solicitors attending our first roadshow, it was clear that there are serious concerns that some practices could get left behind by the changes or, worse still, fall foul of highly punitive new penalties – and face massive fines of anything up to £250m for a practice and £50m for the individual concerned.
“While it’s plain that the top level of fines is intended for the biggest players, solicitors do need to address this issue quickly because the responsibility lies with them to prove that they have a whole series of structural and organisational changes in place.”
However, says Ian Muirhead, head of SIFA, it’s not all bad news. “There is a major regulatory dividend, in that to the extent that the starting point for OFR is the requirement that firms must establish effective management systems and controls, this will make them much better able to face up to the competition arising from the new entrants to the legal services market.”
SIFA has developed a suite of services to assist practices as they move towards COLP and COFA compliance, including providing a compliance manual, training, advice and ‘health checks’ alongside regulatory webcasts, ABS application advice and OFR installation programmes.
More information can be found on www.sifalegal.co.uk.
Tags: COFA, COLP, compliance officer for finance and administration, compliance officer for legal practice, OFR, outcomes-focused regulation