As the Principles comprise the fundamental tenets of ethical behaviour the SRA expects all firms to uphold, this is likely to be the starting point for the review, with areas such as integrity, equality and diversity, and acting in the best interests of clients, being at the fore.
Codes of Conduct
The initial areas that are likely to come into focus for the SRA are those based around how firms manage their compliance and client money obligations, for example:
- Compliance and business systems
- Cooperation and accountability
- Compliance Officers
- SRA Accounts Rules
Subject to what it finds in the initial stage of its review, the SRA may widen its review to cover other areas and consider whether an onsite visit would be appropriate.
Evidence that could be requested
If this review follows the same path as previous reviews firms are likely to be asked to send the SRA evidence to show how they are complying with their obligations, for example:
- Business and management structure (demonstrates how the firm is structured and who holds management responsibilities)
- Compliance records (policies and registers (complaint, negligence claims, suspicious activity reports, etc.))
- Financial plan (demonstrates whether the firm is financially and structurally viable)
- Risk register (demonstrates that the firm’s managers have identified and are managing material risks to their business)
- Training records (these may instead be requested as part of the current ongoing review looking into solicitors’ competency)
- Breach/incident register (used to record any serious breaches or other reportable incidents)
It is critical that you can evidence what you have done to show compliance with the STaRs, so if you have not done so in the past, or your records have been maintained on an ad hoc basis, now is the time to correct the position.
It is also important for you to document your business decisions and why you made them, even if the decision is not to change something, for example, when you review your AML practice wide risk assessment you must document when you reviewed it, what you changed, and if no changes were made, why this was.
Remember, just because your firm may not have been reviewed by the SRA in the past, doesn't mean it won't be in the future, and even if it has been recently reviewed doesn’t mean it won’t be again; it only takes one review to ruin your day!