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Tracey Calvert

Director, Oakalls Consultancy

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“the SRA might not have hit the right spot and more work might be needed to finetune the proposals to satisfy all the critics”

Wellbeing expectations and ethical consequences

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Wellbeing expectations and ethical consequences

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Tracey Calvert considers changes to the SRA's Standards and Regulations related to the inappropriate treatment of others and fitness to practice

The Solicitors Regulation Authority’s (SRA) consultation on changes to the Standards and Regulations, with proposals designed to clarify the regulator’s interest in health and wellbeing at work, closed on 27 May. Compliance professionals eagerly await news of the regulator’s next steps.

The proposals arise in connection with two topics which have created much work for the SRA and the Solicitors Disciplinary Tribunal – firstly, the inappropriate treatment of others by regulated individuals and within authorised law firms and, secondly, a solicitor’s fitness to practice and health issues which might affect this.

The SRA believes these rule changes will address issues associated both with toxic work environments and also with undeclared health issues. These topics of regulatory interest make sense.

There are many examples of individuals being unable to adopt the required professional standards because of the environment in which they operate; individuals who are treated in a way that falls short of acceptable equality or inclusivity values or where a solicitor’s health issues are cited as a reason why they were unable to maintain their professionalism. The SRA’s proposals are designed to bolster the regulatory starting point for individuals and authorised firms and for the regulator themselves.

Impact of rule changes

There are many conversations about whether the proposed rule changes will achieve the SRA’s desired outcomes. A number of critics, including the Law Society of England and Wales, have expressed concerns. Despite the many previous conversations about the need to address toxicity and to bring the legal profession in line with other regulatory regimes where fitness to practice is considered in a codified fashion, it seems the SRA might not have hit the right spot and more work might be needed to finetune the proposals to satisfy all the critics.

The SRA proposes individual solicitors (and registered European and foreign lawyers), as well as authorised entities, are under a regulatory duty to challenge inappropriate behaviour in others. This might be easier said than done unless there is an element of proportionality added to the wording. Is a newly qualified solicitor required to challenge inappropriate behaviour in the same way as a more experienced member of the profession. And when are firms expected to act on issues of toxicity?

When would this become a serious and reportable breach? Will this become a weaponising regulatory tool which will be used inappropriately by disgruntled colleagues or as a device to bolster or reduce employment concerns? And don’t we already have these requirements included in the Standards and Regulations (noting Principle 6 and chapters 1 of each of the two Codes of Conduct), so this is unnecessary duplication on the part of the SRA?

The acknowledgement that fitness to practice is a regulatory requirement sounds like a positive development but again, there have been criticisms. The wording of the rule changes, (and changes are suggested in respect of the SRA Assessment of Character and Suitability Rules and the SRA Authorisation of Individuals Regulations), impose a positive self-reporting obligation on individuals with health issues. Is this fair? What happens if an individual does not recognise health issues or interprets a health consideration differently to the SRA? Does the SRA have the necessary expertise with which to assess medical issues bearing in mind that its decision-making can have consequences for a solicitor’s career?

We will of course see what happens and whether the consultation results in rule changes. However, regardless of any future changes to the SRA Standards and Regulations, the SRA’s project delivers a clear message to authorised firms about regulatory interest in the working environment. The SRA has a long-held belief the correctly constructed working environment is instrumental in facilitating the ethical behaviour that is necessary to support the delivery of legal services in a professional and principled manner. The consultation is a continuation of this line of thought.

The now archived Principle 8 from the SRA Handbook (2011-2019) begun this conversation with the core duty being that ‘you run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles’. In other words, we were told whatever our role in the business, we had a part to play in helping to ensure it was well run and this was for the benefit of clients and in connection with management duties.

Principles

The current principles in the Standards and Regulations do not include such a directional duty. This message is now found elsewhere. The SRA Code of Conduct for Firms instructs authorised firms that the intention is to “create and maintain the right culture and environment for the delivery of competent and ethical legal services to ethics” and chapter 2 of the same Code lists compliance and business systems which the SRA expects to see.

Well-run firms – and their managers, Compliance Officer for Legal Practice (COLP) and Compliance Officer for Finance and Administration (COFA), risk and compliance colleagues and those with human resources responsibilities – will have considered these expectations and made the connection between lack of wellbeing initiatives and the risk of unethical behaviours manifesting themselves.

Firms are supported through the publication of guidance, case studies and research reports on the topic. The guidance is ‘Workplace environment: risks of failing to protect and support colleagues’ and the research is titled ‘Workplace Culture Thematic Review’. Both documents are available on the SRA website and, if not already downloaded and part of your resources library, are now essential reading.

The SRA’s concerns are that a poor workplace environment is detrimental to the wellbeing of employees, which could add to ethical failings or burnout. A poor culture has a negative impact of individual ethical behaviours and a professional service being received by clients.

In comparison, a positive workplace enables professionalism and supports a higher standard of service to clients. Positivity also supports staff retention and loyalty to the business.

This direction of regulatory travel must be understood by the right people in the firm so the firm is in a position to respond to any concern or enquiry about the workplace culture and be able to demonstrate the promotion of positive ethical behaviours. Suggested compliance steps include the following:

Step 1 – identifying which of your colleagues should be part of the wellbeing conversation. How are you going to inform them of latest developments and what decisions do they need to make?

Step 2 – use the SRA’s guidance and consultation as a reason for a review of the firm’s current position. Are your systems and controls effective in addressing the SRA’s concerns about how the business is run and how wellbeing is managed?

Step 3 – can you see the firm’s compliance strategies reflected clearly in the firm’s systems and controls? If not, what needs to change? Do you need a new wellbeing policy?

Step 4 – identify what – or who – is a risk to the firm and its relationship with the SRA? Wellbeing initiatives will be jeopardised by non-compliance, so who are your mavericks who must be brought in line? How will this happen?

Step 5 – what communication strategies are necessary to ensure your compliance culture objectives are understood and put into practice?

Step 6 – how are you going to ensure your response is suitable and there is compliance in practice? Staff feedback through supervisory conversations and other means will identify the strengths and weaknesses in your response and facilitate continuous improvement.

Tracey Calvert is director at Oakalls Consultancy Limited oakallsconsultancy.co.uk

 

 

Tracey Calvert is a consultant at Oakalls Consultancy Limited oakallsconsultancy.co.uk

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