Over recent years, compliance and risk management has been an increasingly prominent and ever-evolving issue for law firms. (Updated 27 June 2023)
In the Starting up section of this website, Start-up compliance provides an excellent summary of the topic, covering SRA authorisation, COLP and COFA roles, SRA Standards and Regulations, financial issues, continuity and contingency planning, client care, reporting and monitoring, and accreditations.
Under SRA rules, you must have a compliance officer for legal practice (COLP) and a compliance officer for finance and administration (COFA). But it's important for the partnership to recognise that compliance is not something that can just be delegated to the COLP and COFA. The aim must be to create a culture of compliance throughout the firm. As well as a set of SRA Accounts Rules FAQs we have summarised the six most common breaches and how to avoid them.
Financial compliance requires a similar approach – not just in terms of protecting client assets but also the requirements of HMRC and Companies House. While day-to-day tasks may be delegated to the finance team and accountants, the firm's partnership (or directors) retain ultimate responsibility.
A useful starting point is to involve people across the firm in identifying the risks the firm faces and the best approach to mitigating them. Particular areas of concern may include data protection and GDPR, regulations around money laundering and bribery, the ever-present threats of cybercrime and the longer term challenges of Brexit.
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