The Solicitors Regulation Authority (SRA) is to beef up its monitoring of firms’ anti-money laundering (AML) efforts and begin a review of continuing competence, its draft 2020/21 business plan has revealed.
The regulator also unveiled a series of other measures, including a one-year review of the Standards & Regulations (STaRs).
This is the first time the SRA has consulted on its annual business plan , for the year from 1 November, and follows the recent publication of its corporate strategy for 2020-23.
To meet its legal obligations to prevent money laundering, the SRA said it would expand its AML visits so as to visit all high-risk firms on a three-year rolling basis, along with visiting a sample of lower-risk firms – the SRA will also review the methodology it uses to risk rate firms.
Further, every month it will call in and analyse a sample of firms’ AML policies, procedures and controls, or their risk assessments, “and we are planning to undertake a thematic review into tax advice”.
This means the 2.5% of the SRA’s £70m budget that is currently spent on AML activities will increase to 3%.
The oversight regulator, the Legal Services Board, has begun work on a review of continuing competence  that could lead to periodic checks on lawyers’ fitness to practise.
The SRA is following suit: “We recognise the importance of not only high standards at point of entry into the profession, but also throughout a solicitor’s practice over many years, so we will also undertake a strategic review of our approach to regulating solicitors’ continuing competence.
“This is likely to be a programme of work that continues over several years.”
Linked to this, the SRA said it would keep the quality of advocacy and criminal practice under review, and during the coming year look to “enhance our quality assurance” of the police station representatives accreditation scheme by reviewing the current arrangements with a view to making any required changes in 2021/22.
“Looking ahead, we may also want to consider a suite of qualifications to address challenges and opportunities as the legal market and the profession develops,” the plan said, but it did not elaborate on what this might mean.
The SRA also promised to increase resources to its rolling programme of reviewing law firm websites – and instigating enforcement action if necessary – to ensure they meet the transparency requirements.
Other activity in 2020/21 includes:
- A year one evaluation of the STaRs, including an assessment of the equality diversity and inclusion implications for both the public and the profession;
- Establishing an in-house ‘arms-length’ quality assurance team for all SRA disciplinary work;
- Undertaking a full review of the fees its charges solicitors and law firms;
- Researching cyber prevention methods and how other industries/regulators/jurisdictions have responded, “as well as working with key stakeholders to undertake a review of how losses linked to cyberattacks and fraud can be better prevented using technology and innovation”; and
- Opening an office in Wales – where around 2.6% of practising solicitors and 4% of firms are based – so that “we can work more closely in partnership with different interest groups, including the Cardiff office of the Law Society, on the key issues for Welsh consumers and the profession”.
The plan also discusses its budget for the year – which is nearly £4m less than in the current year – which is out for a parallel consultation  in conjunction with the Law Society.
It said: “As we start to consider our longer-term forward budget, we are acutely aware of the current political and economic context.
“The impact of Covid-19 on the profession, consumers and, indeed, the wider economy is likely to be significant and long lasting. There is potential need for greater regulatory activity at a time of this significant financial uncertainty for the profession and law firms, at the same time as the economy is adapting to a post-Brexit transition environment.
“With this in mind, we want to avoid any increases in our part of the practising certificate fees… for the foreseeable future and will work towards this.”
The SRA stressed that, over the last five years, it has “absorbed significant additional costs” – including £4m of pay inflation – through efficiency savings.