Compliance officers for legal practice (COLPs) should be allowed to buy in independent external advice at their firm’s expense in the event of a conflict with management, according to two senior solicitor consultants.
Peter Scott and Stephen Ralph, both consultants and practising solicitors in Penningtons’ professional practices group, said that internal disputes and conflicts will “inevitably” arise between COLPs and law firm managers and it is best to plan for them.
Mr Scott also runs his own professional consulting practice. Until 2000 he was the managing partner of Eversheds’ London and European offices.
A right to seek external advice – which managers would also be bound to accept and implement – is one of a number of policies the pair recommended firms adopt to assist COLPs fulfil their responsibilities to ensure compliance with Solicitors Regulation Authority (SRA) regulations. But they said it is uncertain whether “the role of the COLP will in practice be workable”.
Writing in the Law Society’s Legal Compliance Bulletin, they said a potential flashpoint is where “individual partners or groups of partners fail to follow the necessary procedures for compliance required by the COLP and management”. A reluctance by lawyers to ‘be managed’ is an attitude commonly found within partnerships, they said.
Managers are also to blame when they turn a blind eye to bad behaviour and poor conduct by big-billing partners “in the interests of financial expediency and/or the profitability of the firm”. These heavy hitters have “often been allowed to escape or avoid censure and sanctions”, the authors observed.
Planning in advance for conflicts is vital: “The scope for conflict between a COLP, management and individuals is real and significant, and while it is not feasible to provide for all eventualities, if the potential for conflict is not provided for then it will be difficult, if not impossible, for a COLP to effectively fulfil the role. The COLP, the firm and its members and partners will all then be at risk.”
They advised that partnership and membership agreements should be amended to make it explicit that all members/partners are obliged to comply with the SRA Handbook and “lend themselves to such procedures are necessary” to ensure compliance, as judged by management and/or COLPs. Partners who fail to cooperate should face “sanctions such as suspension, an involuntary retirement notice or expulsion”.
Other proposals to avoid conflicts include: incorporating a whistleblowing policy; giving COLPs full access to partnership information and the right to attend management meetings where they are not otherwise senior enough; and indemnifying COLPs in relation to their duties, in particular “to the extent that he/she becomes involved in penalties, costs or expenses”.