COLPs and COFAs have been in post for almost a year and in that time their role in delivering the SRA’s outcomes-focused regulation has been widely discussed. Now, as compliance officers reach the first anniversary of their appointment, Redbrick Solutions Head of Sales & Marketing, Jo Hodges considers some of the key issues and challenges coming out of the new model of regulation.
One of the biggest struggles for many firms in 2013, was deciding where to start on their compliance journey. There is just so much to comply with and gaining an understanding of the SRAs key priorities and common risk areas has been critical to help firms develop comprehensive and timely action plans.
For many firms, the first task for the COLP was to ensure their public facing information and client care documentation were compliant. Over the last few years, compliance services advisor, Legal Eye has reviewed hundreds of Client Care Letters and Terms of Business documents and found that only 16% contained accurate regulatory information. Some may argue that this is understandable, given the number and frequency of required changes (earlier this year at least 3 changes were required in as many months), but keeping these documents up to date and ensuring that fee earners always use the correct versions can be a tough job for the COLP.
Effective file review processes, including follow up of corrective action, should be a key component in a firms approach to risk management, yet for many firms, the task of updating file review processes, introducing lexcel compliant workflows and documented audit trails has proved to be an onerous and time consuming task.
And of course, there is the issue of compliance failures. Working out how to record and monitor breaches, and then deciding what should be reported to the SRA, and when, is no easy task. The first hurdle is to determine if a material or ‘non-material’ breach has been committed, but there are no clear definitions. The SRA has published a series of case studies to assist COLPs and COFAs in their assessment of a breach, but ultimately it comes down to the judgment of an individual nominated person.
So, as we reach the end of the first year, smaller firms in particular will be reviewing the cost of fulfilling the COLP and COFA regulations. It’s not easy for smaller firms, they have more limited resources and generally can’t employ someone solely to handle compliance, it has to be done on top of the day job, and whilst it may be possible to pay for support from external consultants, overall responsibility for compliance still rests with the law firm.
It’s no surprise then, that one year on, we still come across people who feel nervous about the responsibility of being a COLP or COFA. The commitments are challenging and the consequences of making a mistake are daunting. It seems that nominated persons welcome any support available to help them fulfil their roles competently.
Redbrick Solutions are committed to providing clients with as much support as possible. Early in 2013, the Redbrick Solutions COLP and COFA toolkit was launched. It includes:
· The full set of Law Society COLP and COFA Forms*
· Restricted access files, where nominated persons can record information on breaches, SRA involvement and outcomes
· Automated and fully customizable reports, to give insight into trends and risk levels.
· A compliance database for the storing of important compliance related documents.
In the Spring Redbrick Solutions’ partnership with Legal Eye was announced and all Redbrick clients were offered a free compliance review of a client care letter, terms of business, website and email footer.
The partnership with Legal Eye kicked off with a series of COLP & COFA workshops aimed at Managing partners and nominated persons. These were a sell-out success, and were repeated in September. Demand for places was still very high, so there are plans to run further seminars in the Spring of 2014. The agenda covers a host of topical issues, including:
· Extent of responsibilities – a more detailed review of the Handbook.
· Personal protection – running through typical changes to constitutional documents and/or a side letter.
· Basic staff training requirements, practical expectations of fee earners, what to look for in a file review, and whistleblowing policies.
· Material breaches – what guidance is available, what are the key factors – some interactive case studies.
· What to expect in the Annual Information Report.
· Practical compliance tips for COLPs.
On top of all of this, Redbrick Solutions is constantly evolving its product to assist firms with the management of risk and compliance. In September functionality was added which allows firms to include additional risk management tasks in workflows, to carry out extensive conflict checking and online form integration now automatically checks to ensure fee earners are using the latest versions.
Compliance is an on-going journey and for many firms the challenges will continue into 2014. To find out more about the support available from Redbrick Solutions, including the 2014 seminars, please visit www.redbricksolutions.co.uk or call 0845 166 2629.
*(license fees payable)