Sunday, April 3, 2011

Firms May Need to Double Risk Investment in Response to SRA Outcomes-Focused Regulations

The Solicitors Regulation Authority (SRA), which regulates more than 120,000 solicitors in England and Wales, continues to make process to issuing updated professional rules which will go into effect later this year. Its current approach is "outcomes-focused." It's set to publish an updated handbook on April 6.

This new regime brings several changes and uncertainty still abounds. Legal Week recently reported results of a study that show: "One in two partners lack understanding of workings of SRA's new regulatory regime." (Subscription required to access the complete article.)

With the new rules in place, firms will have to:

  • Demonstrate compliance efforts through use of tools such as a written compliance plan, and "risk register" inventory and ranking of identified risks and response efforts.
  • Appoint multiple compliance offices
  • Keep a record of identified rule breaches
  • Proactively report to the SRA "material" failures to comply
Regarding these changes Legal Risk LLP, advisers on professional responsibility and regulatory issues, note:
  • "We believe that for many firms this will involve a doubling of investment in compliance, whether through time, money or both."

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