LAST WORD
TOP 10 COMPLIANCE MISTAKES AND HOW T Compliance should be neither an afterthought nor a burden – it should be a natural consequence of running your law firm and managing your accounts well. The SRA will tell you that anti-money laundering and mishandling client money are the two most common mistakes law firms make. So how do you avoid the SRA’s intervention? writes Julian Bryan, Managing Director, Quill HERE ARE 10 COMPLIANCE MISTAKES LAW FIRMS MOST OFTEN FALL FOUL OF: 1. NOT PAYING ATTENTION TO THE LATEST SRA ACCOUNTS RULES: The SRA regularly updates its rules, and it’s up to you to be aware of these changes and understand how it impacts your accounts function. The best thing to do is follow the SRA news and adopt a compliance-centric 26 www.birminghamlawsociety.co.uk
approach to your business in order to avoid serious SRA Accounts Rules breaches. 2. INCORRECTLY OPERATING A CLIENT ACCOUNT: Ensure your client account includes the required level of information and that you don’t provide banking facilities to clients or third parties. It’s essential that your staff are aware of the relevant money laundering regulations and what constitutes provision of banking facilities. On the same point, don’t suffer lack of understanding about how to operate without a separate client account, should you choose this route. SRA’s Rule 2.2 is all-ornothing. It gives you the choice of exemption from having a client account (across the whole practice, not on a client-by-client basis). Whilst this may sound like an easier option (and cheaper as you don’t need accountants’ reports), it could create more work by asking clients to pay third parties directly and subsequently making sure these payments have been made.
Alternatively, another option permitted by the SRA is Third Party Managed Accounts which can provide client onboarding checks, card processing and outsourced client account services within one solution. You must decide what makes the most sense for your business. 3. NOT MAINTAINING A CLEAR BREACH REGISTER: You and your employees must be suitably trained to spot suspected breaches, and you must document how discovered breaches will be rectified and keep a register of this information. 4. NOT HAVING A PAYMENT OF INTEREST POLICY: Your policy of interest should clearly state how money held in your client account will be handled, including when it becomes due and the rates you’ll use. 5. NOT THOROUGHLY CHECKING YOUR RESIDUAL AND SUSPENSE BALANCES: Analyse which of these monies you currently hold, determine if
