It's all in the STARs.

On 25 November 2019, the Solicitors Regulation Authority (SRA) Handbook will be thrown into the metaphorical bin and the SRA Standards and Regulations (STARs) unwrapped and put on lawyers’ bookshelves. The profession has had ample advance warning of the change, so it’s unlikely there will be a honeymoon period during which we’ll be allowed to become comfortable with the new requirements. So are you ready? Many rms have already considered what’s needed for a smooth transition to the replacement toolkit, but if you haven’t, there’s no need to panic as there is still time to plan and implement changes. There’s comfort in the knowledge that we’re dealing mainly with evolution rather than revolution, so much of what’s needed to hit the ground running is adaptation rather than overhaul. There are various steps compliance professionals can consider taking to ensure they are compliant, including:

1. READ THE STARS This may be obvious, but without reading the raw materials it will be di‡cult to identify how you will be aŠected by the changes and whether you want to choose to make changes to your current methodologies.

The SRA describes the STARs as “the standards and requirements we expect our regulated community to achieve and observe, for the benet of the clients they serve and in the public interest”. Firms must evaluate who is aŠected (if at all) by each section and whether it’s necessary to change systems and processes to demonstrate compliance. Don’t miss the signicance of the introduction to the new Code of Conduct for Firms which says the standards and business controls which follow “aim to create and maintain the right culture and environment for the delivery of competent and ethical legal services to clients”. With this in mind, standard 4.3 is selfexplanatory: “You ensure that your managers and employees are competent to carry out their role and keep their professional knowledge and skills, as well as understanding of their legal, ethical and regulatory obligations, up to date.” Demonstrating compliance is essential, not only because the standards expect it but because it will improve regulatory interaction on a practical level. Reading the materials will assist with formulating vital compliance answers where your thinking must be demonstrated, for example: —— Which parts of the materials are relevant to the rm and why; —— Which requirements should be internalised with systems and controls; —— Which parts we can safely ignore and why do we believe this to be the case.

2. FURTHER REGULATORY GUIDANCE

The SRA’s handbook was a long read and oŠered more non-mandatory guidance than the STARs; and while we often disliked the indicative behaviours, at least they sat with the outcomes they were designed to support. This made interpretation less complicated. However, the STARs contain the barebones of the requirements. Guidance and commentary are located alongside rather than within the text. Extra care will be required to ensure the complete regulatory picture is harvested and used for an appropriate rmwide and individual compliance response. We already have a glut of guidance notes supplementing our understanding of the new rulebook, and these should be read. Worryingly, we already have one corrective note about what is meant by new phrases and language. Anyone concerned about the new and seemingly more onerous conditions attached to the operation of a client’s own account must know that this regulatory stance has been softened by the SRA’s publication of a statement of its position regarding rms operating a client’s own account. The regulator suggests we need not strictly comply with all regulatory requirements in rule 10.1 of the SRA Accounts Rules 2019 if we can comply with alternative expectations. Given some of the more unusual expressions and nuances of the STARs, it’s probable more statements will follow.