Posted by Martina Hogg is a lead compliance consultant at Legal Futures Associate Compli
Will you be my COLP for ever and ever?
This Valentine’s Day, will you be searching for that special someone to send your heart all a flutter? Well, don’t waste your time. What you need is that certain wonderful boy or girl who in no way impinges on your ability to comply with your regulatory obligations.
So forget that Barry White CD and the bottle of Prosecco; what you really want is a criminal records check and possibly a polygraph.
We can all agree that a very small number of reckless and/or dishonest individuals within the profession cause an exponential amount of trouble for the majority.
One way of working towards eradicating that problem is to be very selective about who is allowed to enter the profession in the first place. Nobody wants to see a struck-off solicitor or convicted fraudster managing, owning or exerting any influence over a regulated law firm.
In the last few years the Solicitors Regulation Authority (SRA) has made the authorisation process far more stringent than it used to be and its work in that respect must be applauded. Not only has the SRA raised the bar in terms of those permitted to enter, the regulator has increased work on policing the perimeter. This means collating intelligence on bogus firms and, in some cases, acting to curtail the activities of struck-off solicitors or persons subject to section 43 orders.
Whilst I welcome these improvements, I was taken aback recently when reviewing a FA2 form (approval of an individual) as part of a client’s alternative business structure application.
Question 9.20 asks: “Is the candidate aware of any matters which relate to the honesty and integrity of any person they are related to, affiliated with, or act together with which may influence the candidate’s authorised role within the applicant firm/authorised body?”
Unlike others in section 9 of the form, this question is not followed by a statement indicating that answering “yes” is likely to result in the application being refused unless the candidate can demonstrate exceptional circumstances.
However, the accompanying guidance does state that the SRA may refuse your application if it has “evidence reflecting on the honesty and integrity of a person you are related to, affiliated with or act together with” if it has “reason to believe that the person may have an influence over the way in which you will exercise your authorised role”.
But what constitutes “evidence” in relation to honesty and integrity? And what constitutes “reason to believe” that one person will exercise any influence over another? Most intriguing (or frightening, depending on your point of view) of all, how will the SRA find out who is related, affiliated or acting together with whom?
Social media may be great for marketing but what do you really know about your connections on LinkedIn and other networking sites?
So if you do happen to meet the man or woman of your dreams this weekend and it transpires that they are a reformed bank robber, then you may have some difficult discussions ahead. If, on top of finding true love, you are then offered partnership, you will now have to complete Form FA2 so that the SRA can approve your partnership and that means answering question 9.20.
True love or partnership? Can you have both? If not, which would you choose?
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