Conference season! Well, it seems like a million years ago now. Part of what we do is to attend all the important ones so that our clients don’t have to! And then we report back with any information they need to know about and any changes they might need to make to the way they run their practices. The sad thing is many of our clients would like to attend in person but finding the time can sometimes be impossible.
The first one we got to attend was LegalEx which is held annually over two days at London ExCel. Historically this has always been well attended by legal professionals until the pandemic hit in 2020. This time there were all the usual speakers and the themes they addressed were all relevant and topical. The SRA were there of course talking about all the usual hot topics including agile working of course. But it felt strangely quiet. Covid infection rates were on the rise and maybe, many potential delegates felt it was not worth the risk. That is a shame because a lot of thought had been put into the programme and there were a lot of interesting exhibitors demonstrating their products – and giving away tons of free goodies! Hopefully 2022 will be a better year for LegalEx.
Next up on the circuit was none other than the ILFM conference. For those of you that might have missed it (how that could be I just don’t know!) it was brilliant. For the second year running it was a virtual conference with a dazzling array of speakers. Mark Adderley of the ILFM Executive Council gave an excellent insight into the issues legal accounting professional need to address as a matter of urgency. The top two that I picked up on were Accounting Policy Documentation, or more specifically a lack of them and our old favourite, Residual Balances.
It’s now been over two years since the latest version of the Solicitors Accounts Rules were introduced and many firms have still yet to produce their own Accounting Policy Document. It is so important that firms address this. How do you know if you are following your own internal procedures if you have nothing to measure them against? Your reporting accountants will begin picking firms up for this and rightly so. Don’t forget, all managers are jointly and severally responsible for compliance by the firm, it’s managers and employees with the Accounts Rules. Now is the time to address this and put in place an Accounting Policy before it is too late.
Mark also touched on another subject that is all too familiar with firms and that is the ever-increasing number of residual balances. The covid situation has not helped this particular problem and for many firms it is getting out of control. They need to be dealt with now and if you need to bring in external resource to do this you should. One of the speakers at the conference was Lynne Squires from the Access to Justice Foundation. For those of you that aren’t aware, The Access to Justice Foundation is a charity created by the legal profession, to raise funds to support the provision of free specialist legal advice. Under the Accounts Rules, you are required to return client money promptly as soon as there is no longer any proper reason to hold those funds. It is not acceptable to hold the money for 12 months and then write to the client to confirm you are still holding it. That may have been common practice but in fact was never allowed, even in the old rules. So why not make an immediate difference to people in need by developing a programme that supports the charity and clears your residual balances. If you are still struggling to understand how this might work in practice, please get in touch and we will show you how.
The last conference of the November season was the SRA Compliance conference held at the ICC in Birmingham. This has been running for several years now (apart from 2021 of course) and just gets better every year. Of particular interest to everyone was the session held by the SRA on AML and what the SRA has been doing during the past 12 months. SRA AML Reviews. In terms of numbers…
- 85 visits to firms
- 70 desk-based reviews
- 98 firm-wide risk assessment reviews
- 273 reports to us about suspected breaches
- 16 internal sanctions
- 13 cases brought to the Solicitors Disciplinary Tribunal
They have clearly been busy and for good reason. Whilst the obligation of AML falls under the responsibility of the MLCO it is common for this to be dealt with by the COLP. However, the impact of a failure to have adequate AML procedures in place will inevitably impact financially on the wider firm. The SRA made it very clear they will be continuing with these reviews throughout 2022 so if you have any concerns that your firm does not have the right policies in place including training of all staff you should raise this with your COLP or COFA as a matter of urgency. AML is a rapidly changing landscape and firms must be able to demonstrate to the regulator that it is being taken very seriously.
I am looking forward to 2022, it will hopefully be another year when we can continue to get out and see our clients face to face. The pandemic has allowed us to change the way we utilise technology to improve the customer experience. But it still can’t beat jumping on a train and heading off to see whoever wants to talk to us!