One of the freedoms introduced by the Legal Services Act 2007 is the ability for a law firm to switch regulator. As long as the regulator is listed in Schedule 4 of the Act and is authorised to regulate the reserved activities that the firm undertakes, then ostensibly the firm can move to them. The Act provides for new regulators, and newcomers have joined the list. So for example, the Institute of Chartered Accountants can now regulate probate activities.
In my last blog, I wrote about the Law Society’s consultation on alternatives to client accounts. It’s a highly-charged subject. These are my personal thoughts on the matter.
Looking after someone else’s money always carries huge responsibility. It’s a fiduciary arrangement, with the equitable duties arising from that relationship. The SRA Accounts Rules – now in version 14 – provide further overlay. Together, these impose considerable responsibility.
For some time there has been growing concern about solicitors operating their own client accounts. The usual reason is increasing cyber crime, and the fallibility of client accounts containing vast amounts of money with relatively unsophisticated controls. The firm’s COFA should lead on all this.
The high-profile case of Purrunsing –v- A’Court (a firm) (2016) is all the proof you need that Anti Money Laundering checks must be taken seriously. They are not an administrative function that you can delegate to a junior member of staff – or worse still, ignore. You must read and assess all the information and draw conclusions from it. Had Mr A’Court done so in this case, he might not be nursing a headache of at least £230,000.
Are you missing out because you do not understand the Solicitors Accounts Rules as well as you should? Many Solicitors firms could markedly improve their cashflow without any new clients coming through the door. But it takes some skill and an understanding of the Accounts Rules.
