Start as You Mean to Go On
Opening your own law firm is an exciting time, but it also comes with a whole load of responsibility, things which before now were someone else’s problem.
All law firms must ensure that they comply with their Regulator’s requirements and the law in relation to financial crime and data protection. In some parts of the legal sector, such as those firms which the Solicitors Regulation Authority regulates, firms must appoint Compliance Officers to ensure the firm takes steps to meet those obligations.
While you need to follow the rules and legislation, it isn’t always immediately obvious how you practically implement them. I often see policies and procedures ‘borrowed’ from a previous firm or a template bought online, which don’t necessarily fit the firm’s size or reflect the processes in place. As a result, processes do not work, and compliance doesn’t happen.
Building a compliance programme that fits your business is critical because the consequences for non-compliance can lead to closing your firm or exposing you to criminal liability.
At this stage, it’s worthwhile to be clear what a ‘Compliance Programme’ is – it is simply a framework for ensuring that clients, staff, and your firm are protected; it’s no more complicated than that. It’s about doing the right thing.
So here are the key steps you should take when building your framework:
1. Get expert training on compliance
You don’t know what you don’t know about compliance, so getting good quality training will be crucial. As a Fee Earner, the training you are likely to have had so far will be explaining the firm’s interpretation of the rules and regulations, but now you need to know what the actual rules and regulations are so you can work out how to apply them in your own firm. So seek out Compliance Officer Masterclasses which cover not only the rules but how to apply them.
2. Work out who is going to do what
If you’re a sole practitioner, all roads for compliance may lead to you, but if you have any staff or other Partners, it may be useful to try and divide up the roles.
Key roles are:
• Compliance Officer for Legal Practice
•Compliance Officer for Finance and Administration
• Money Laundering Reporting Officer
• Money Laundering Compliance Officer
• Complaints Handling Management
• Data Protection Management
• Professional Indemnity Insurance Claims Management
Document using a job description of what each role-holder is responsible for and what will happen in the event of a dispute, particularly concerning reporting matters to Regulators.
3. Carry out a full risk assessment
Take a blank sheet of paper and write down all of the risks which could affect your business. Think about the risks from client delivery, business disruption, financial risk and operational risks. One of the common challenges with this is it is difficult to think of issues that you’ve come across, and it can be difficult to identify risks that have not yet happened to you. It might be an idea to speak to your insurers for their input on common risks or check out one of the many useful groups on LinkedIn for Compliance Officers in the Legal Sector.
4. Be clear on what needs to happen to manage risks and demonstrate compliance in your firm
This is when it is important not just to use a precedent or template. You need to consult your risk assessment and make sure your policies and procedures mitigate those risks. Make them individual to your firm. Then make sure you communicate the requirements effectively to everyone in your firm who has to follow them.
5. Go back round again
Compliance is an ever-evolving workstream. There’s no end to it and, even when you do think it is working well, you should make sure you regularly review the policies to ensure they keep pace with how your firm grows and any changes in legislation. So put some time aside in your diary now to make sure you have the time for this review exercise.
Investing time now to build your programme will set you up for the future. However, skipping this work now will make it harder to build once practices are already established. Good luck and do get in touch if you would like further advice!