Is it career suicide to take on the COLP/COFA role?

Outcomes-focused regulation (OFR) has been promoted as a less prescriptive regulatory regime that allows UK firms to observe mandatory principles of practice – none of which are surprising or unusual – to achieve the best outcomes for their clients.

The intention is to allow providers of legal services the flexibility to reflect the risks associated with the nature of the work that they do, the sophistication of their clients and the resources at their disposal. So far so good!

However, limited guidance is provided and our regulator has its own issues to deal with in understanding how it can demonstrate that it is both proportionate and effective in performing its role.

The Solicitors Regulation Authority (SRA) seeks to be the regulator of choice for the majority of those providing legal services, solicitors or others, in an environment in which we, as practitioners, have a choice of regulatory regime. Practitioners may look for a regulatory regime that appears to best fit and understand their practice.

Many firms have questions about the OFR regime. Unsurprisingly, the bedding down of a new regulatory yardstick, uncertainty as to whether those who regulate can fully understand the nuances of practice and surveys suggesting that the majority of practitioners may be non-compliant together create doubt as to where best to find answers.

Into this mix we are required to nominate compliance officers for legal practice (COLPs) and compliance officers for finance and administration (COFAs) to take responsibility for entity-based compliance. With personal obligations on the COLP and COFA for non compliance, some fear that there will be intractable differences between COLPs and their practices.

As with other management roles, there is a loneliness in discharging a responsibility on behalf of your firm. This is nothing new and goes with the territory. But, who will really be ready to take on the role of COFA or COLP? Should people shy away from taking on these roles? Is it career suicide?

A major issue for those taking on these roles is the reporting of compliance failures by their own firm to the SRA. Again, the obligation to report apparent conduct breaches to our regulator is not new. However the personal obligation on the COLP is and may inhibit both those within the firm from approaching a COLP for guidance and the COLP’s response.

This will be unfortunate, as the professional principles of practice are fundamental to all that we do and the compliance function of any firm, incidental to practice. The COLP should be involved in a constructive dialogue with his or her colleagues. It is an important and fascinating role.

At a time when practitioners are being called upon to provide better value and demonstrate innovation in the delivery of legal service, the COLP has an opportunity to be at the centre of the discussion.

The COLP can provide useful advice to colleagues on the firm’s own rules that fill the gap between principles and outcomes. It is a relationship that should not be constrained or led by a fear of the need to record and report breaches. That seems to take an unduly pessimistic view of the role, colleagues and the firm.

However, I make these comments with caution as there remains an element of uncertainty about what the role will entail in terms of time and the attitude that may be demonstrated retrospectively by our regulator, if or when something has gone wrong.

There are no predecessors to pass down advice. However, help is at hand. The Law Society recently formed a compliance reference group of 17 volunteers, of whom I am one. COLPs from top 100 firms can obtain advice from the group on compliance issues related to the SRA Handbook. Chancery Lane’s risk and compliance service provides similar guidance to the wider profession.

To prosper in the future, firms will have to demonstrate that they regard many of those involved in their management as being as important as their fee earners. This requires appropriate training, development and recognition. While, for the time being, a COLP must be a solicitor, it may be that over time others will be recognised as being appropriately qualified for the role.

robert.bourns@tltsolicitors.com