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SRA warns of "unthinking" compliance

The Solicitors Regulation Authority (SRA) has reminded firms to ensure they have considered the outcomes for clients after learning some might be taking a tick-box approach to compliance with OFR.

The SRA moved to a regime of Outcomes-focused regulation (OFR) on October 6, requiring solicitors to ensure their work has the needs of clients and the public interest at its heart. To support this move, the SRA's new Handbook of regulatory requirements makes it clear that the 10 regulatory Principles and then the Outcomes in the new Code should be the first port of call for firms' compliance with the new regime.

The SRA is concerned that some firms might see the Indicative Behaviours in the Code of Conduct as a checklist, rather than possible examples of practice. And, in a speech to nearly 70 delegates at the "Risk management for law firms" Conference in London, SRA Executive Director of Supervision, Risk and Standards, Samantha Barrass, has warned firms to be wary of the pitfalls of "unthinking" compliance.

Samantha Barrass said: "The indicative behaviours are not mandatory, they provide examples or a starting point to aid thinking on how to deliver the Outcomes and Principles. Unthinking reliance on the Indicative Behaviours is not a risk-free approach to compliance; they do not cover all regulatory scenarios or compliance requirements, and certainly focussing attention on the achievement of the behaviours alone could actually lead to a firm overlooking or de-prioritising emerging risks.

"Some solicitors I have spoken to have proudly told me that in preparation for OFR they had extracted the indicative behaviours, and ticked off every one that could possibly be relevant as being present in their organisation in order to present a model of best-practice compliance to the SRA. But can the firm say, hand on heart, that this approach really gets to grips with the nature of the firm itself and its business practices?"

In the speech, Samantha Barrass also warned firms against being attached to the old 2007 Code and said that firms would be running a compliance risk if they adopted a 'painting by numbers approach' and as a result failed to deliver ethical and competent practice. She made it clear that the SRA is first and foremost looking for genuine, contextualised engagement with the Principles and Outcomes.

The "Risk management for law firms" Conference organised by Managing Partner Events took place at the De Vere Holborn Bars on Tuesday and Wednesday, December 6 and 7. This annual event aims to provide learning and networking for risk management leaders, with the aim of providing information to help firms defend themselves against strategic and operational risk.

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