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SRA makes it easier to get financial stability advice

Comprehensive advice and support to help firms maintain financial stability in difficult economic times has been published by the SRA.

The Authority has created a special section of the site to support solicitors' good financial management in light of recent high-profile failures at a handful of large firms. A report to the SRA Board last month highlighted a number of areas of concern involving firms and financial stability.

The advice support Principle 8 of the Code of Conduct, which says solicitors must run their business or carry out their role in the business effectively and in accordance with proper governance and sound financial and risk management principles. The Mandatory Outcomes and Indicative Behaviours listed in Chapter 7 of the Handbook, including Outcome 7.4, are also reiterated. These state solicitors must maintain systems and controls for monitoring the financial stability of their firm and risks to money and assets entrusted to them by clients and others.

There are also examples of what constitutes good and bad behaviour in terms of financial management and contact details for advice and support. View the guidance, which has been added as a resource for Chapter 7 of the Handbook.

Samantha Barrass, SRA Executive Director, said: "The current economic climate coupled with other developments in the legal services market is creating financial pressures for a number of firms, some of whom are not behaving responsibly in their approach to managing these pressures. We are not suggesting that the majority of firms are suffering, but there are around 150 that we have serious concerns about, while there are a number that could certainly be a little sharper when it comes to managing their finances.

"We will continue to engage with those we have serious concerns about, to look at possible solutions. We want this guidance to reach those who could further improve their financial management, or those who have not yet engaged with us.

"This section of the website contains useful information against which firms can assess their financial situation, and if they feel there is a problem, we would urge them to get in touch with our Supervision team at the earliest opportunity."

The report to the Board in March outlined some of the issues facing firms, and how this could lead to a much higher than anticipated number of interventions because of financial failure.  

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