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UK law firms 'struggling' under compliance burden

COLPs concerned about SRA’s ability to adequately supervise their firms, says Law Society

4 October 2013

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By Manju Manglani, Editor (@ManjuManglani)

UK law firms are struggling under the burden of regulatory compliance and question the Solicitors Regulation Authority’s ability to properly supervise them, the Law Society has said.

Speaking at Managing Partner’s COLP & COFA Conference 2013 yesterday, Pearl Moses said that COLPs are finding it difficult to balance their heavy work volumes and compliance responsibilities.

Moses, the Society’s practice lead consultant for risk and compliance, said that COLPs are typically forced to spend between 25 and 75 per cent of their time on compliance work.

“This has a big impact on their fee earning,” said Moses. “Is the SRA aware that this impacts on some firms’ ability to be profitable?”

A lack of clarity regarding reporting requirements to the SRA was also a common issue being raised by COLPs.

A big source of concern, in particular, was whether the regulator’s supervision levels are appropriate, adequate and of sufficiently high quality.

“What would work in theory is not always that effective in practice,” said Moses.

Other concerns raised by COLPs, she said, included how to create a culture of compliance when it was not necessarily a top management priority or rewarded within their firms.

COLPs also told the Law Society that they would like to know how they compared to their peers in terms of the robustness of their compliance documentation. Many, she noted, said they wanted to be “best in class” in their grouping.

Numerous queries were also raised with the Law Society as to how to measure ‘material’ breaches, said Moses.

She warned that internally rectifying a material breach does not mean that it does not need to be reported.

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Risk & Compliance