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COLP Insider – 18th April 2017

Anne Bode

For this newsletter we welcome many new readers who signed up at Legalex at the end of March.

We hope you enjoy our newsletter and find it insightful and helpful.   We know that your time is your most valuable asset, so our newsletter summarises everything you need to know in easy to digest bite size chunks!

If you have any feedback on our newsletter, or if there is any particular topic you would like us to cover in the future, please let us know, we would love to hear from you.

 

 

A culture of fear?

The junior lawyer’s division (JLD) this month released the results of its resilience and wellbeing survey.  As the name suggests the survey was carried out so that the JLD could better understand the resilience and wellbeing of junior lawyers.  Surprisingly, only 214 responses were received from over 70,000 members, nonetheless the results are interesting.  Over 90% of those that responded said said they felt stressed and under pressure at work, with more than 25% describing the stress as ‘extreme’.  Perhaps it is not surprising that 64.8% attributed their stress to high workload, with ineffective management (49.5%) and lack of support (48.4%) coming in second and third respectively.  A staggering 53.1% said they had nearly made a crucial error and 36.7% said they had made a mistake as a result of work-related stress.  Importantly 73.8% believed that their organisation could do more to provide help and guidance in relation to stress at work.

 

Why is it important?

We have been tracking for some time the worrying trend of young solicitors unable to cope and lacking proper support from their employees, read our blog here.  In our view, we have a moral obligation to look after our junior lawyers and we should all be questioning whether we are doing enough to support, mentor and encourage less experienced solicitors.

 

 

Spring update to Risk Outlook

In its Spring update, the SRA updated three of its seven priority risks: information security; standards of service and considering vulnerability; and money laundering.   The SRA reported that 75% of cybercrime reported to it involved email modification fraud and that 25% of law firms have reported being targeted by cybercriminals.  As regards standards of service, one of the points noted was that only 20% of people who complained to LeO had heard about LeO from their lawyers. It would be interesting to see if any of these complainants had actually received this information, as it is a mandatory obligation as set out in Outcomes 1.9 and 1.10.  We would find it surprising if 80% had not received this information at all!  The Spring update makes no mention of the Money Laundering Regulations 2017, with the SRA deciding to concentrate on the Criminal Finances Bill which is expected to receive Royal Assent later this year.

Why is it important?

The Risk Outlook highlights the risks that the SRA consider important and those matters which are likely to receive most of its focus.  We suggest that you think about the risks identified and consider whether you need to prioritise any gaps in your systems and procedures.  The SRA has and will take action where risks are not taken seriously – this year we have already seen solicitors rebuked for failing to report cyber security failures, and see below the news of a solicitor suspended for 12 months because of money laundering breaches.

 

 

Rise in number of solicitors struck off

The SDT published its annual report on the 12 April 2017.  This revealed an increase across all disciplinary measures in 2016 compared with 2015, with an increase in striking off solicitors from 56 to 76, suspensions up from 15 to 20, fines up from 33 to 51, and reprimands from 4 to 8.  The SDT also acknowledges that the cases it deals with are becoming more complex which is one of the reasons why it sat for 260 days in 2016, an increase of 40% compared with 2015.  In its report, the SDT makes clear that it is committed to keeping costs down, and its actual spend in 2016 was £2.4m against a budget of just over £2.9 million.  The SDT had budgeted for appeals against decisions made by the SRA in respect of ABSs, but there have been no appeals since the first applications were made, one of the reasons that its actual spend is lower than predicted.

Why is it important?

The SDT have an important role to play in adjudicating disciplinary breaches in order to maintain the public confidence in the profession.  As stated by Susan Humble in the report ‘The infection from the bad apple taints public confidence in the reputation of the majority of solicitors who are honest, and who have integrity and probity.’  The increase in the disciplinary measures, especially the number of solicitors struck off, is significant.  Does this represent a more serious issue within the profession (especially junior lawyers as highlighted above), or is the tribunal becoming increasingly willing to give this ultimate sanction against a solicitor?

 

 

Fifth ABS regulator

On the 3rd April 2017, the Bar Standards Board (BSB) begun licensing ABSs, making it the fifth body that can authorise ABSs.  The BSB has approved 72 lawyer-only regulated entities since 2015, but now it will be able to license businesses which are also owned by non-lawyers.  As a regulator of advocacy-based services, it will specialise in ABSs that are advocacy and litigation focused.

 

Why is it important?

The BSB is not expecting huge numbers, and is predicting to regulate around 20 each year.  It is however a step towards a further innovative market, as stated by BSB Director of Regulatory Assurance Oliver Hammer ‘we believe this development encourages further innovation in the provision of legal services’.

 

 

ABS news

We are delighted that we assisted Cardiff based law firm Greenaway Scott secure an ABS licence.  Greenaway Scott provides corporate and commercial advice to companies with specialism in the life science, technology, pharmaceutical and IT sectors.  The firm is looking to bring on board complimentary businesses in M&A.

 

 

Notable disciplinary decisions

  • An immigration solicitor has been referred to the SDT accused of abusing and undermining the immigration system
  • three partners from Clyde and Co were each fined £10,000 and the firm fined £50,000 for allowing the client’s bank account to be used as a banking facility and failing to act in accordance with the Money Laundering Regulations 2007.
  • The former boss and GOFA of Kingsley Law was fined £7500 and rebuked for 11 accounts rule breaches and two breaches of the SRA principles.
  • A solicitor was rebuked for failing to comply with the Court.
  • An employee of Clarkes Legal was rebuked, fined £2000 and had a section 43 order against him for submitting a CV to Clarkes Legal that had stated that he attended the University of Leeds and Yale University when he had not, and stating that he had been called to the bar whereas he merely completed the BVC.
  • A solicitor has been suspended for 12 months for breaching money laundering regulations and accounts rules by transferring nearly £1.3m to a Belize account.

 

 

Law Society – practice note updates