Legal sector COVID-19 survey results and SRA Rules
Tuesday, 02 March 2021
Now it’s well over a year since the new SRA Accounts Rules came into force, legal practices should be familiar with them, and any changes to internal procedures should have been documented. Couple that with nearly a year of dealing with lockdown restrictions, and practices will no doubt have had to adapt again. However, we mustn’t forget the fundamentals and compliance with the SRA rules needs be maintained.
The SRA accepts that adaptations to firms’ procedures have been needed to adjust the shift in working practices due to COVID-19. So long as the tailored systems are in the spirit of the rules and they are documented, the SRA should not deem you in breach of the rules. For example, if due to lockdown your definition of “prompt banking of client money” is twice weekly rather than daily, that is plausible so long as it marries to your procedures and your clients are aware.
We’ve identified several areas of common non-compliance in the past year and as a reminder, suggest that you make sure you have the following areas in hand:
- Make sure you are not providing your clients’ banking facilities, and in conjunction, you are dealing with residual client balances accordingly (rule 3.3 and 2.5).
- Conduct reconciliations of clients’ own accounts operated by you as sole signatory at least every five weeks (rule 10). A reconciliation is more than annotating the bank statement!
- Review your procedures around transferring money for your fees and disbursements to confirm this is in line with rule 4.3 and updated guidance.
- Make sure your staff are adequately trained and know their role in keeping client money safe.
Our legal team are running a webinar on 9 March which will be touching on the results of a recent survey, along with an update on the SRA Accounts Rules. If you’re interested to hear more, register to attend here.
In addition, we continue to look at the impact of COVID-19 on the legal sector and how it has influenced future plans. We’ve analysed and compared the results of two surveys undertaken in the past nine months which focus on four key business areas:
- Fees and profitability including the impact on fee income, best and worst billing service lines and the change in profit levels.
- Staffing including recruitment, redundancies and office vs remote working.
- Cashflow including lock-up, work in progress (WIP) and debtors.
- Business strategy including key changes and what firms are prioritising in 2021.
You can use this information to benchmark your practice against other firms locally, as well as nationally, along with looking at the next steps you should be taking for 2021. With normality on the horizon, there’s no time like now to seek opportunities you can take advantage of and put plans in motion.
The results of the survey can be found here in four infographics which detail the key statistics and what it means for the sector.
Please get in touch with our Legal team if you would like to discuss anything. You can find contact details on the Our People section of the MHA Larking Gowen website. Alternatively, call 0330 024 0888 or email email@example.com.