Are you ready for the new year on 1 November? Key actions for law firms

Now that the summer is an increasingly distant memory, law firms will be turning their attention back to business. But management should also focus attentions on compliance, and in particular everything that needs to be done ahead of the end of the practising year on 31 October.

This brings with it a range of important obligations for law firms and solicitors.

1. Renewal of practising certificates and registrations

Every solicitor who will practise in the new practising year (or be deemed to act as a solicitor by operation of section 1A of the Solicitors Act) must hold a valid practising certificate.

The same applies for registered foreign lawyers (RFLs), whose registrations should be renewed at the same time. Firms should act now to ensure that all solicitors and RFLs (including those in overseas offices) and are opted in to the SRA’s bulk renewal process, which allows firms to manage these renewals centrally.

If a solicitor’s practising certificate or an RFL’s registration is not renewed, that individual will not be authorised to practise from 1 November. Any work undertaken in that capacity would be unauthorised practice, exposing both the individual and the firm to serious regulatory consequences.

In addition, where the individual is a partner, omitting their renewal may impact the firm’s eligibility to remain SRA-authorised. In particular, where the firm is a recognised body (the traditional SRA regulatory status), any non-authorised partners will mean that the firm automatically loses authorisation after 90 days due to section 18(3) of the Legal Services Act, which can have serious consequences.    As we note in our article here, all it takes is one missed registration, for example a new partner who is not opted in to bulk renewal, to trigger the loss of the firm’s authorisation.

Firms should start early by reviewing a full list of solicitors and RFLs (and RSLs and RELs, if any) in the business, with cross-checking against staff records to ensure no one is omitted. Particular attention should be paid to those who may be on maternity/paternity leave, secondment, or sabbaticals, as they are often overlooked, as may those who are based in overseas offices.   

2. Payment of the firm’s periodic fee

In addition to individual practising certificate renewals, firms must also pay the annual periodic fee set by the SRA. The amount payable depends on the firm’s turnover and other factors declared in the annual return.

Failure to pay the periodic fee to the SRA by the deadline is a regulatory breach and could result in suspension of the firm’s authorisation.

Firms should ensure that the information submitted in its most recent annual return is accurate, as the fee is calculated from this data.

3. Continuing competence obligations

Solicitors and RFLs must demonstrate compliance with the SRA’s continuing competence requirements under Rule 3.3 of the Code of Conduct for Solicitors, which requires them to maintain their competence to carry out their role and keep their professional knowledge and skills up to date.

This means they must reflect on their practice, identify learning needs and undertake relevant training or development in order to address such needs.  They must record the steps taken to do so, whether as part of a mid-year appraisal process or otherwise.

Firms should have systems and controls in place to ensure that all lawyers are reflecting, planning, and recording their CPD.

4. Wider compliance considerations

The end of the summer and the start of the new practising year is also an opportune moment for managers and compliance officers to review their broader compliance frameworks. This might include reviewing firm-wide policies to ensure they reflect current SRA Standards and Regulations and where applicable the AML regulations, which are amended frequently and which require the firm to have a practice-wide risk assessment (PWRA).

Many law firms have recently been subject to disciplinary action failing to have an adequate PWRA in place.  It is recommended that this be reviewed at least on an annual basis to account for changes in the firm’s practice areas, the use of new technologies or updates to the law, national risk assessments or applicable guidance.   

Firms should also ensure that other policies and procedures are considered, for example to take into account the recent introduction of the new offence of failure to prevent fraud or the legal duty to take reasonable steps to prevent sexual harassment, or where policies state they are to be reviewed annually.

Contact us

If you have any questions about these issues in relation to your own organisation, please contact a member of the professional services team or speak to your usual Fox Williams contact.