With large sums in their office and client bank accounts, and access to sensitive information about their clients, legal firms are an attractive target for fraudsters.
Moreover, fraudsters’ methods are becoming more varied and sophisticated. Can your firm’s financial controls combat fraud, or do they need a ‘spring clean’?
Our recent experience
Last year there was a significant change to the Solicitors Accounts Rules, giving more weight to the accountant’s judgement of risk.
Hot on the heels of the Budget, I’m sure the questions being asked by many partners at solicitor practices across the country are, “Should we consider incorporation to obtain limitation to liability or not?” and, “What are the consequences now?”
The majority of the legal practices that we see are predominantly partnerships and partners are looking at how to structure the practice in order to attract and obtain potential future partners.
Major changes are being made to the way in which all taxpayers interact with HM Revenue and Customs (HMRC). The Government is referring to these changes as “Making Tax Digital” (MTD), and they are proposing a staged introduction to the new rules, starting for many in April 2018.
Larking Gowen has prepared and submitted a comprehensive response to HMRC’s consultations on Making Tax Digital with regard to how it impacts our clients and suggesting matters to improve implementation for businesses.
Following on from Thomas’ blog on financial fraud, the Solicitors Regulation Authority (SRA) has recently issued a warning against fraud schemes that involve solicitors in order to make the scam appear more credible to the general public.
The specific warning was in relation to high-yield investment schemes, or ‘get-rich-quick’ schemes, where there has recently been a number of law firms linked to potentially fraudulent incidents.
This blog covers one specific area of our Legal Team’s expertise – financial fraud.
In a nutshell…
Financial fraud is an intentional act of deception involving financial transactions for the purpose of personal gain.
One way in which we see businesses being targeted is through the use of cybercrime and cyber scams.
When purchasing a commercial property there are many considerations to be taken into account. Matters such as the chosen business vehicle, legal agreements, stamp duty and corporation tax are often high up on the list of things to consider. Unfortunately VAT can be sometimes forgotten about until the last moment, or not even considered at all – a potentially costly mistake.
You are no doubt aware that the SRA is currently undertaking a consultation process on the new SRA accounts rules 2011, which look at the handling of client money.
In short, a book of detailed guidance and rules is being condensed and ‘simplified’ to around six pages, comprising of 13 key rules.
The MHA Legal Benchmarking Survey has recently been published and findings show yet another encouraging level of growth, particularly within the Property and Construction sectors.
Fee income across firms with at least five equity partners has increased by at least 13%, with some showing increases of 27%.
The subject of this blog is one specific area of our team’s expertise – commercial disputes.
In a nutshell…
Commercial disputes arise as a result of any form of conflict that occurs between businesses or those within a business.
There are different types of commercial dispute, from failure to fulfil contractual obligations to business owners falling out over differing opinions.
What internal controls does your firm have in place to ensure that client money is protected?
Do they perform their intended roles effectively?
How can you be sure?
The Solicitors’ Regulation Authority (SRA) Accounts Rules have seen a considerable change in the past few months, involving the removal of a prescribed list of tests to undergo on an SAR audit, and the introduction of a new rule which reads as follows:
“The Accountant should exercise his or her professional judgement in determining the work required for the firm they are instructed to obtain the report on in order to assess risks to client money arising from compliance with these rules.