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Last updated: 3 Mar 2022
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SRA Accounts Rules 2019 – how to benefit from their increased flexibility

The SRA Accounts Rules 2019 opened up new ways for law firms to modernise their approach to compliance, yet many firms continue to base their procedures on the 2011 rules. Here we outline what your firm should be doing to benefit from the increased flexibility of the 2019 rules. 

The 2019 rules are shorter, simpler and less prescriptive than the 2011 rules. They place greater trust in your professional judgement, which reduces the regulatory burden, but they also provide you, as a firm, with greater flexibility. The SRA's aim was to allow solicitors to be more agile and adaptable in how they work day to day, as opposed to imposing a ‘one size fits all’ approach.

However, despite all the changes that have been introduced by the SRA, many firms have chosen to stick to what they know and continue to largely base their procedures on the 2011 rules, which poses the question: why are law firms reluctant to modernise their approach?

In this article we explore how you can make the 2019 rules work best for you.

About the authors

Catherine Edwards

+44 (0)207 556 1246
edwardsc@buzzacott.co.uk
LinkedIn

Harriet Farrance

+44 (0)207 556 1249
farranceh@buzzacott.co.uk
LinkedIn

The 2019 rules are shorter, simpler and less prescriptive than the 2011 rules. They place greater trust in your professional judgement, which reduces the regulatory burden, but they also provide you, as a firm, with greater flexibility. The SRA's aim was to allow solicitors to be more agile and adaptable in how they work day to day, as opposed to imposing a ‘one size fits all’ approach.

However, despite all the changes that have been introduced by the SRA, many firms have chosen to stick to what they know and continue to largely base their procedures on the 2011 rules, which poses the question: why are law firms reluctant to modernise their approach?

In this article we explore how you can make the 2019 rules work best for you.

Strategic tips for creating new rules

Strategic tips for creating new rules

First, take a step back and consider this at a strategic level. The fundamental principle is to safeguard client money and this should always be at the forefront. Rather than taking the 2011 rules as your starting point and adapting them, start afresh and build a new set of rules and principles to better suit your firm. This might seem like a daunting task, but it will ease the burden in the long run. The new approach should be based around your workflow, with guidance included for each step of the process. 

Top five ‘strategic’ tips

Here are our top five ‘strategic’ tips to help you along the way:

1. Cybercrime remains one of the biggest threats to safeguarding client monies, yet we rarely see reference to it in firms’ written policies and procedures. Document your firm’s approach to cybercrime and ensure you implement regular training for all staff members. Keep up regular dialogue with your bank as well to stay abreast of the ever-changing methods used by fraudsters.

2. Where possible, make use of the functionality within your client matter software to run electronic checks. For example, run a report to show any matters with client money balances that have had no client account activity within the last six months. This could help to identify any balances that should be returned to clients.

3. Review your interest policy to ensure as a firm you’re not missing out on the interest earned on client monies. Interest rates are set to increase further so it is important to ensure your policies are clear regarding how interest will be treated and it is essential that this is communicated to clients.

4. Perform regular COFA spot checks. Part of the COFA’s role should be to regularly review client matters to identify breaches and implement processes to prevent them happening again. This should be done on a sample basis with all live matters being included in the sample population.

5. Run an annual ‘compliance training day’ for all fee earners and finance team members.  Try to report back on common breaches and work together to improve your internal controls.

The key operational changes to make

The key operational changes to make 

At an operational level, the 2019 rules require you to document your own systems and look at what’s reasonable for your firm. This should be particularly helpful for small firms as it will allow you to respond in line with your own specific situation.

These are the top five ‘operational’ tweaks to make to take advantage of the increased flexibility in the rules:

1. Define timeframes to suit you e.g. promptly could be ‘within the finance manager’s next two working days’ as opposed to ‘the same or next day’.

2. Move away from the use of cheques and adopt a fully online banking approach.

3. Ditch the traditional ‘slips’ and implement a fully electronic payment/ receipt request process.

4. Use email or Adobe sign to electronically evidence review processes (rather than physical signatures/ slips); e.g. for COFA reviews of bank reconciliations.

5. Raise bills and send them to clients as soon as possible to allow for swifter client to office transfers to cover your costs.

There are a number of ways in which you can make the most of the increased flexibility in the SRA Accounts Rules and these will be different for each firm. It is important to take the time to put together specific policies and procedures to suit your firm and ensure these are tailored to your needs and capabilities, always remembering to ensure safeguarding client monies is at the forefront.

Get in touch

Get in touch

If you would like further assistance with the SRA Accounts Rules 2019 or if your team would benefit from some “refresher” training, please complete the form below and one of the team will be in touch.

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