Law firms have a number of obligations they need to consider when looking at employee screening, for example:
- SRA Principles – upholding the public trust and confidence in legal services and acting with integrity.
- SRA Code of Conduct for Firms – complying with regulatory arrangements, maintaining records to demonstrate compliance, managing material risks, and duties of compliance officers for legal practice (COLP) to ensure compliance.
Accreditation obligations
Firms that hold accreditations will have other obligations that in effect enhance the regulatory obligations:
- Lexcel – firms must have procedures to deal effectively with recruitment, which must include references and ID checking, and where appropriate, the checking of disciplinary records.
- Conveyancing Quality Scheme (CQS) – firms are required to ensure that all staff covered by CQS are subject to Disclosure and Barring Service (DBS) checks.
Money Laundering Regulations (‘Regulations’)
The Regulations require law firms within the regulated sector (subject to the size and nature of the business) to screen relevant employees before an appointment is made and during the course of their employment; best practice says that all regulated firms should undertake screening, no matter how big they are or the nature of their business due to the lack of clarity around which firms would be covered by the ‘size/nature’ exclusion.
In terms of what should be covered during screening, the following would be a good start:
- Skills
- Knowledge
- Conduct
- Integrity
Effective pre-employment screening is likely to include the checking of:
- Qualifications – do they really have the qualifications they profess to have?
- Regulatory/disciplinary records – does the SRA Digital Register raise any concerns?
- Employment references – if provided, do they raise any concerns?
Effective ongoing screening is likely to include the checking of:
- Competency records – is the employee competent to carry out their role?
- AML training – has the employee undertaken training relevant to their role and AML responsibilities?
- Appraisal reports – have any concerns been raised about an employee’s suitable to undertake work covered by the Regulations?
Employment references
The provision of employment references is optional, however, if they are provided, they must be fair, accurate and not misleading.
Due to the potential risks associated with providing references many firms choose not to provide them, however, such risks are very low as long as best practice guidelines are followed. For example, if an employee’s performance record shows they need to improve the reference can’t say they excelled at the job.
There have been numerous cases of employees forging references in order to obtain jobs, so it is important to check that they match things like the employee’s curriculum vitae (CV); if in doubt, call the previous employer and clarify matters.
Insurance obligations
The insurance market has taken a real battering over the last few years due to Covid-19 and other natural disasters, and as a consequence they expect firms to do all they can to reduce their exposure to risk, for example, internal fraud.
Many insurers require firms to confirm that they seek references for new staff, with some now requiring new solicitors to complete declarations about their backgrounds and whether they have any regulatory findings against them.
Polls
During the webinar we asked attendees a number of questions around screening and references and some concerning data came out in two key areas:
- Ongoing screening – 53.5% said they do not currently carry out ongoing screening for relevant staff; this is clearly in breach on the Regulations and something the SRA is likely to pick up during any thematic review.
- References – 62% said the references they received for new employees did not contain information that was of any real value for screening purposes; as references should play a major part in the screening process has the time come for those in the money laundering regulated sector to be required to provide detailed references to new employers?
If the above data is anything to go by a substantial number of firms have some real work to do to ensure they are compliant with their screening obligations!
Automated Screening – Is there a better way?
For law firms, it can feel like you’re navigating a compliance minefield at times, what with the threat of hefty fines for non-compliance, your business reputation at stake and the need to employ great candidates fast.
Access Screening is our cloud-based pre-employment and ongoing screening solution. It helps law firms automate processes for conducting background checks and gathering references. Users can validate documentation, create profiles for employees, and track the progress of each applicant within the compliance dashboard.
As well as being fast and automated, Access Screening will streamline your screening processes and help to mitigate the risk and cost of bad hires and a non-compliant workforce in your practice. It also removes the inefficiencies of working with multiple third parties, while allowing you to check and re-check the compliance of all employees to meet legislative and regulatory standards.
80% of references can be completed automatically online, and it runs over 140 background checks, including data, documents, passport, DBS/DS, sanctions and financial and regulatory obligations for AML, Lexcel, CQS and SRA.
If you’d like to find out more about Access Screening, make sure to book your personalised one-to-one demo with one of our consultants.