Jean-Yves Gilg

Editor, Solicitors Journal

The compliance benefits of ethical behaviours

The compliance benefits of ethical behaviours


A tension lies in reconciling the appropriate ethical response with the realities and pressures of working in the modern legal industry, writes Tracey Calvert

In the past few years, focus on professional ethics has been sidelined by the need to consider risk management and compliance. We have seen firms invest time and resources in tools with which to demonstrate to the regulator that the right things happen.

However, professional ethics matter as well. It is essential that an individual knows what behaviours to display and makes the right decisions about how to act. Without an ethical marker, decisions may be made that bring the professionalism of the individual concerned into doubt.

It seems that the Solicitors Regulation Authority (SRA) also takes this view. The two most obvious changes in emphasis are in the SRA's competence statement and in the teasers we are being given about handbook consultations.

The competence statement (an essential compliance resource) starts with a consideration of the qualities solicitors must possess. Rather than describing legal know-how first, the regulator references ethical behaviour by stating that solicitors should 'act honestly and with integrity, in accordance with legal and regulatory requirements and the SRA handbook and code of conduct...' This includes:

  • Recognising ethical issues and exercising effective judgement in addressing them;

  • Understanding and applying the ethical concepts which govern their role and behaviour as a lawyer;

  • Identifying the relevant SRA principles and rules of professional conduct and following them;

  • Resisting pressure to condone, ignore, or commit unethical behavior; and

  • Respecting diversity and acting fairly and inclusively.

We have also been told the
SRA consultations will include proposals for a new, shorter conduct code for solicitors and revised principles building on
the statutory definition of professional principles in the Legal Services Act 2007. This is also very telling; the professional principles contain behavioural requirements, which should not be unfamiliar:

  • Authorised persons should act with independence and integrity;

  • Authorised persons should maintain proper standards of work;

  • Authorised persons should act in the best interests of their clients;

  • Persons who exercise before any court a right of audience, or conduct litigation in relation to proceedings in any court, by virtue of being authorised persons should comply with their duty to the court to act with independence in the interests of justice; and

  • The affairs of clients should be kept confidential.

Sometimes, decisions may
not fit with commercial considerations, but which are
the correct judgement call.
The consequences of the wrong decision can have a life-changing effect on the individual concerned, and may well also have repercussions for the firm
in which they work.

Another tension that ought
to be evaluated by the firm is knowledge of the correct professional behaviours and how these manifest in practice.
No one should be under the misapprehension that these behaviours are easy to demonstrate, or that it can be assumed everyone has a common understanding of what is meant or the choices which must be made. We only have to look at some recent Solicitors Disciplinary Tribunal decisions to know that, sometimes, the right ethical choice is hard to see. Now we are freed up from hours-led continuing profession development, perhaps a good use of a training budget should be on programmes about ethical behaviour.

In fact, I would suggest that the compliance team will want to consider how the non-negotiable behaviours are factored into the work and culture of the firm. Perhaps a good starting point is an assessment of the ethical robustness of colleagues or, to use the language of the competence statement, a consideration of whether they will be able to resist pressure to condone, ignore, or commit unethical behaviour.

Some sense-testing questions are suggested below:

  • Independence - from whom and what?

  • What does integrity mean?

  • What behaviours support the delivery of a proper standard of work?

  • What decisions lurk behind the phrase 'best interests of clients'?

  • Duties to the court - when does this trigger the need for difficult conversations with clients? and

  • Professional secrets - an understanding of the far-reaching implications of getting this wrong.

Behaving ethically is essential if a solicitor is to have a good relationship with their regulator. The SRA will want to have confidence that individuals operate to the agreed professional standards and in ethical environments. Behaving ethically has other rewards, too: working in a professional legal environment with like-minded people; having the support to be able to be open and responsible in terms of ethical dilemmas; and in delivering services in a way that creates confidence in the culture and incentivises clients to remain loyal to the firm.

Tracey Calvert is director of Oakalls Consultancy Limited