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EXCLUSIVE: OFR ‘unfair’ to small UK law firms, says Law Society president

'City firms have found it much easier to understand and comply with OFR'

6 August 2014

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By Manju Manglani, Editor (@ManjuManglani)

Small UK law firms have experienced far greater difficulties than City law firms in complying with outcomes-focused regulation (OFR), Andrew Caplen has said.

Speaking exclusively to Managing Partner on this topic, the new Law Society president said: "I think that City firms have found it much easier to understand and comply with OFR than the smaller firms.

"The City firms have their own regulatory departments and OFR, in a sense, is something that they've been quite used to, in effect, having in any event.

"The smaller firms I think find it much more difficult because they actually did appreciate a rules-based approach whereby they knew exactly where they were and what exactly they should and shouldn't do. And so I think OFR has been a little bit unfair on the smaller firms."

COLPs and COFAs regime 'more appropriate' for large law firms

Caplen also took issue with the Solicitors Regulation Authority's (SRA's) requirement that all UK law firms have a compliance officer for legal practice (COLP) and a compliance officer for finance and administration (COFA).

"Is the COLPs and COFAs regime appropriate for all types of practices? I don't know.

"Maybe we went a little bit far down a particular model, maybe the COLPs and COFAs regime is not always appropriate for smaller firms, and maybe it is more appropriate for bigger firms," he said.

"With some of these regulatory provisions, we have to accept that they don't fit completely across the board. I think ethical standards of course do - what a solicitor is and how a solicitor should behave has to apply across the board - but some of the more intricate bits perhaps may be more relevant for a particular type of firm than another type of firm."

End to mandatory CPD hours not 'the optimal decision'

Another concern raised by Caplen was about smaller law firms' ability to comply with the new continuing professional development (CPD) regime, under which there will be a move away from a points-based system to an outcomes-based 'continuing competence' system.

"I'm not sure that that was the optimal decision," he said. "I think that, once again, you have a difference in the way that different types of firms may think."

Caplen continued: "We all know that, with continuing education, you can get your points quite easily on free courses or by attending events, but it is important that they also be relevant.

"So, from that point of view I do understand some of the thinking behind it, that it's not just getting so many points, it's a case of making the training sensible and appropriate for the type of firm that you're in.

"However, I think the points-based system also gave a framework that people needed to know that they could work within. I think that, for some people, that was a great help and great comfort, and I also think that it gave reassurance to the public."

He noted that, although solicitors will "obviously meet the outcomes at the end of the day", the requirements under the new continuing competence regime are "still a little less certain".

Caplen added that it was "quite an unusual placement" of responsibility for COLPs to be expected to ensure their firms' compliance with the new continuing competence requirements.

He concluded: "I would imagine that, in the coming months, that might be something that the SRA might look at again - the COLPs and COFAs regime and how it operates, whether it is always totally appropriate for all types of firms and whether the roles are correct or appropriate from within that particular part of responsibility."




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