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Strategic Scoop #3
May 31, 2024

With May almost over and summer well underway, we at The Strategic Partner would like to see you into June with some of the news highlights that have been impacting your business over the last two weeks. Besides that, The Strategic Scoop is a fantastic way to catch up on all the articles we have published of late, all of which offer insider knowledge and invaluable advice on how to keep your firm ahead of the developments and changes, allowing you to adapt and plan ahead of time. Your Strategic Scoop is your one-stop news outlet, ensuring you are always equipped with the best guidance possible to keep your firm thriving.

Firm Fined a Formidable £120,885 for SRA Rules Breach

On 19 April, a solicitors’ firm based in Norfolk was fined for failing to replace client money that had been inappropriately withdrawn from the client account between 1 April and 25 March 2022.

Back in 2001, the fined firm’s predecessor was instructed to manage the administration of an estate. A mistake was made when interpreting the rules of intestacy, and the estate was distributed improperly. Monies were paid out incorrectly to beneficiaries, indicating the money had been incorrectly withdrawn from the client account. A portion of this money was then replaced between 2001 and 2014. Despite this, after becoming a licenced body, its client account had a shortfall of £21,958.38. However, the shortfall was not replaced until 25 March 2022 as the result of a qualified accountant’s report.

Between 1 April 2014 and 25 March 2022, the firm failed to replace client money, meaning the firm was in breach of rules 13.8 and 7.1 of the SRA Accounts Rules 2011 and Principle 6 of the SRA Principles 2011. Due to the fact the conduct took place on or after 25 November 2019, the firm also breached rules 2.4. and 6.1 of the SRA Accounts Rules 2019 and Principle 2 of the SRA Principles 2019.

Alongside the financial penalty of £120,885, the firm, headquartered in Norwich, was also directed to pay costs of £1,350. The conduct was placed in conduct band C, which has a financial penalty bracket of between 1.6% and 3.2% of the firm’s annual domestic turnover in the previous year. The regulator was able to issue such a considerable penalty because the firm is an alternative business structure and not subject to the SRA’s £25,000 fining power limit for traditional firms.

To read the full article, click here: thestrategicpartner.co.uk. Alternatively, click here to read the full SRA report.

Banking Facility Allegations & Regulation Breaches: Solicitor Fined £12,777

A solicitor and their firm have been fined £27,000 for allowing the client account to be used as a banking facility for almost ten years. The Mayfair-based firm was found by the SRA to have allowed a partner and their family member to make several payments in and withdraw from the client account. It was revealed there was no underlying legal transaction or service forming part of a solicitor’s service.  

The owner was fined £14,528 and ordered to pay a subsequent £1,350 costs after the Solicitors Regulation Society branded the misuse of the client account “inherently serious”. The solicitor in question, an experienced worker within the profession, is considered to be responsible for his poor conduct, showing only “limited” insight. However, the SRA also noted that the solicitor received no financial benefit due to there being no evidence of harm caused to any party.

The SRA went on to comment, “The level of culpability, the potential for significant harm, the fact that these were not simply minor breaches of the rules, and the need to protect the public and the reputation of the legal profession means this matter requires a greater sanction.”

From 2008 to 2017, the firm failed to establish and maintain adequate risk-sensitive anti-money laundering policies and procedures. Furthermore, it failed to take the necessary measures to ensure that relevant employees were kept up to date with money laundering laws.

To read the full Law Society Gazette article, click here: Veteran solicitor fined for using client account as bank.

Recap: What went wrong?

  1. The firm failed to establish and maintain appropriate risk-sensitive anti-money laundering policies and procedures in relation to Regulation Laundering Regulations 2007 (MLRs 2007).
  2. The firm failed to take the necessary steps so that all appropriate employees of the firm were made conscious of the law relating to money laundering and terrorist financing.
  3. The firm failed to have a documented and compliant firm-wide risk assessment.
  4. The firm failed to establish and maintain policies, controls, and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing.
  5. Seek SRA approval for beneficial owners, managers, and officers of the firm.

Is your Firm Compliant?

If you would like to learn more about how it is the Strategic Partner can work with you to ensure that your firm is compliant with the regulations mentioned above, click the link below to visit our website, where you can browse our brochures for our considerable services on offer, including Risk, Regulation & Compliance Service including AML and our Risk Management & Compliance Review. You can also review the Training and Mentoring services we have available here.

LSB Call for a ‘Step-Change’ in First-Tier Complaint Handling

On May 16, The Legal Services Board stated there must be a ‘step-change improvement’ in first-tier complaint handling to ensure all firms are dealing with them effectively and as fairly as possible.

The oversight regulator wants the Solicitors Regulation Authority to assist law firms to enhance their complaints handling and to use means of enforcement if necessary. Last week, new requirements and guidance were published in relation to concerns that legal providers are doing an insufficient job of handling complaints and putting measures in place to ensure they don’t escalate further.

Alan Kershaw, chair of the Legal Services Board, stated: “too many people experience challenges in having their complaints dealt with fairly and promptly. Often this is because it is not clear how to complain or they feel they come up against a wall of silence.”

The LSB also referenced research, which revealed that nearly half of all complaint cases that came to the Legal Ombudsman had been inadequately dealt with by the firms involved, and nearly one-third of complaints were made before the first-tier process was exhausted. This was due primarily to either fear of the complexity of the process or lack of confidence in it.  

The LSB has said it will now expect regulators to pursue the best complaints resolution alongside a culture of continuous learning and improvement in regard to complaints. The new guidance already published insists regulators use eight weeks as a metric for assessing how efficiently a supposed firm has been able to handle a complaint.

It is vital that complaints procedures be as accessible as possible. It is also essential that the steps taken as a result of a complaint be explained as clearly as possible. Clients must also be informed of their right to make a first-tier complaint and to involve the legal Ombudsman after eight weeks. Furthermore, firms need to supply complainants with updates and maintain communications in plain and clear language that is both “professional and emphatic”. Firms should also consider any sensitivities concerning a case or client and offer an apology where appropriate.

To read the full article, click here.

Property Law Challenges: Staying Competitive and Diversion of Resources

While the UK property market has seen some slight improvements in recent weeks, industry experts remain cautious, noting that while there has been increased buyer demand and sales, it is still challenging for many, especially with ongoing high mortgage rates. A recent article published by Today’s Conveyancer, shows that cash buyers currently have the most significant advantage, comprising over 30% of current property sales, which has seen a significant jump from previous years. However, homeownership is increasingly unattainable for many standard buyers as the market is currently more in favour of those fortunate enough not to need a mortgage. The impact of a slowing market, combined with recruitment struggles seen across the legal sector and a consistent need to drive new business and remain competitive, still pose some of the biggest challenges for law firms to address, especially for small to mid-size practices and those whose work is predominantly reliant on one work source.

Improving Revenue Streams Through Diversion of Resources

Due to the nature of how solicitors and lawyers work, and the training they receive, many will have had some experience in other areas of law, although it may not be their specialism. Making the most of the resources that firms have already established in-house will provide much needed assistance to ensure the firm’s continuity, and to see it through any climate uncertainties and beyond. Furthermore, having staff that can work across other service areas supports other departments in times of recruitment struggles, meaning work does not need to be turned down, or service levels drop.

If firms have not already begun reallocating or merging resources, the time to do so is now. This may involve investing in existing staff by providing training and refresher courses for those who have not handled other areas of law for some time.  

Areas which, at present, are showing continued engagement include: 

  • Wills 
  • Probate  
  • Lasting Powers of Attorney  
  • Matrimonial 
  • Employment  
  • Insolvency 
  • Litigation 

Each of these areas are relevant and needed services at the present time, and many firms are reporting that new instructions continue to arise in these core areas. 

There are some key steps to consider: 

  • Identify Experience and Expertise – Establish with your fee earners what experience they have and, even if limited, whether they are prepared to support other areas of the firm that are receiving incoming work. These are the ideal candidates for cross training or refresher training so you can make full use of the resource you have.
  • Support Tasks – Not all tasks can be completed by a fee earner without the experience to do so, but preparation, taking instructions, drafting, and generally assisting will be applicable. It is important to highlight tasks that can be performed by those without full experience and not to push staff to undertake tasks that could expose the firm to risk. 
  • Update Training – Identify training gaps and deliver training to those who require a refresh or ground up training. As necessary, explain the basics of the service and the applicable law identifying common mistakes that could put the firm at risk of negligence. For those with previous experience, ensure that new practices and changes in the law are brought up to date. Training can be provided via video conferencing, with most firms now having this in place. The training of anyone being asked or volunteering to assist in areas of law that are not their main experience is essential and will form part of the firm’s approach to risk management. Where possible, issue training notes and handouts for future guidance and reference. 
  • Supervision of Staff – Review and check your supervision processes and adapt them as needed. It may seem unusual to ask a more senior member of the team to be supervised, but it is essential to do so and not expose the firm to risk. As always, the level of supervision required can be relaxed over time as the experience and confidence of those moving into new roles grows. Firms must also ensure they are following specific SRA transparency rules regarding displaying the experience of staff or departments involved in specific service areas and confirming who has overall supervision of those departments. Ensure those staff with experience are made available as needed, and where necessary, ‘buddy’ people up for the provision of ongoing guidance and support.  
  • File and Firmwide Audits – As matters are handled, a brief increase in the level or frequency of auditing may be necessary to ensure that the high standards of work and advice are being maintained. This precautionary measure is a sensible addition to a firm’s compliance and risk management policy and strategy.  
  • Quality of Service – Implementing effective training, supervision, and auditing will help to ensure that the advice provided is correct and the service provided meets the expected high standards. Clients are becoming more service and price savvy, with many looking at online service alternatives. It is therefore vital that firms remain competitive and review service delivery and service level offerings.

Although this article is about how to diversify work sources, it also seeks to address the issue for firms that have been over-reliant on property work. Reducing dependence on property has significant benefits which sit alongside retaining and maintaining a healthy property department.

The development of staff is always to be encouraged and using available resources to upskill your staff should be considered a welcome step and part of a strategy to strengthen the firm for the future.

To read the full article on our website, click here.

SCAM ALERTS

Misuse of the Name Stewarts Law LLP

The SRA has recently updated their website to confirm that a website with the address ‘www.stewsolicit.com’ has wrongfully appropriated the name, website structure, images, and fax number of an authenticated firm of solicitors. Stating the office had offices in London and Milan, the fraudulent website provided the following numbers:

+44 (0)20 8040 3797
+39 (0)2821 96445

Please note, the SRA does not authorise a firm of solicitors by the name ‘Stewsolicit’. Emails were sent claiming to be from the Managing Partner at Stewart’s Law LLP. These emails were in relation to a supposed inheritance scam and were sent from the following addresses:

cahilljohn784@gmail.com
info@daedong.co.kr

Emails have also been sent from the address ‘mobhasfaran@gmail.com’ claiming to be ‘Mo Bbhasfaran’. The address provided in the fraudulent letter was ‘105 Saint Vincent Square London EC4A 3BF’. The number provided was 01144203094, accompanied by the fax number 01144203808. These correspondences, however, were regarding a supposed unclaimed investment.

Please be mindful that the SRA does not authorise or regulate a solicitor by the name of ‘Mo Bbhasfaran’, and any business or transactions carried out or using any of the information provided above is not undertaken by a firm or individual authorised and regulated by the SRA.

Lastly, please note the SRA authorises and regulates a genuine firm of solicitors called Stewarts Law LLP. The head office is located at 5 New Street Square, London, EC4A 3BF. The genuine website address is www.stewartslaw.com, and the telephone number is 02078228000.

John Cahill was formerly a Managing Partner at Stewarts Law LLP. The SRA also authorises and regulates a solicitor called Mohan Bhaskaran, who is a Partner at Stewarts Law LLP.

Vardags Limited name misuse in a LinkedIn account for ‘Sarah Graham’

The SRA has confirmed that there is a LinkedIn account for an individual by the name of ‘Sarah Graham’ who is claiming to work as a ‘lawyer’ for Vardags Limited.

Any business or transaction undertaken through the LinkedIn account of ‘Sarah Graham’ is not undertaken by the genuine firm of solicitors.

The SRA authorises and regulates an authentic firm of solicitors called Vardags Limited, whose head office is based at 6th Floor, 10 Old Bailey, London EC4M 7NG. The genuine firm domain is @vardags.com.

The SRA also authorises a genuine solicitor called Sarah Graham, who is not thought to have any connection to the LinkedIn account mentioned above.

The genuine firm Vardags Limited has confirmed that it does not employ any individual named ‘Sarah Graham’ nor has any connection with the LinkedIn account referred to in the above alert.

Fake Law firm by the name ‘Probate Masters Solicitors’

The website address ‘www.probatemasterssolicitors.com’ is claiming to be a law firm by the name of ‘Probate Masters Solicitors’.

The website provides the telephone number ‘+44 7441922015′, the email address ‘info@probatemasterssolicitors.com’, and the postal address ’68 St. Martin’s Lane Westminster London WC2N 4JS’.

The SRA does not authorise and regulate a firm of solicitors called ‘Probate Masters Solicitors’. The website misuses the names and photographs of genuine solicitors.  

Any business or transaction through ‘Probate Masters Solicitors’ is not undertaken by a firm or individual authorised and regulated by the SRA. Please stay vigilant of any of the information provided above.

Terence Walker and Howard Wright, who are both employed at a genuine firm of solicitors called Jackamans Solicitors, are authorised solicitors regulated by the SRA. A genuine solicitor by the name of Sharon Mowat is also employed by the same firm. The genuine profiles for these solicitors, including their photographs, can be found at www.jackamans.co.uk.

Jackamans Solicitors and the genuine solicitors, Terence Walker and Howard Wright, and staff member Sharon Mowat have confirmed they do not have any connection to ‘Probate Masters Solicitors’.

Domain Wrongfully Using the Name of Pennine Kenedy Limited

The SRA Have recently published on their website that it is aware attempts have been made to associate the authentic domain name of ‘www.penninekennedy.co.uk’ with the false domain names ‘www.peninekennedy.co.uk‘ and ‘www.peninnekennedy.co.uk’.

The domain names misuse the name of a genuine firm of solicitors based in Manchester by using only very slight altercations of its spelling.

Any business or transactions through ‘www.peninnekennedy.co.uk’ and ‘www.peninekennedy.co.uk’ are not undertaken by a firm or individual authorised and regulated by the SRA.

To reiterate, the Solicitors Regulation Authority does authorise a genuine firm of solicitors by the name of Pennine Kennedy Limited. Their authentic website is as follows: www.penninekennedy.co.uk

I’ve Been Contacted
What are the next steps?

When a firm’s or individual’s identity has been copied (or cloned), due diligence is necessary. If you receive correspondence claiming to be from the above firm(s) or individual(s), or have received similar information from sources you believe might be suspicious, you should conduct your own due diligence by checking the authenticity of the correspondence by contacting the law firm directly by reliable and established means.

You can also contact the SRA directly to find out if individuals or firms are regulated and authorised by the SRA and verify an individual’s or firm’s practising details. Other verification methods, such as checking public records (e.g. telephone directories and company records) may be required in other circumstances.

Get in Touch with
The Strategic Partner

TSP are always at hand to provide tailored guidance to help you make the most informed and beneficial decisions. Helping you understand the recurrent regulatory shifts and working with you to provide solutions to any problems that may occur as a result is something we are both equipped and prepared to assist you with. With our team of professional specialists and our renowned legal expertise, we can work with your firm to always ensure you are never left unprepared in the wake of legal changes.

Contact Us

That’s all from us at TSP for another fortnight. Issue four of The Strategic Scoop will be available on 14 June, yet should you require any further information or support or would like to learn more about any of what you have read in this issue, please don’t hesitate to contact us via the information below. We will always be happy to hear from you.

For more information on how we can help, call our consultants on 0203 911 9710 or email us at info@thestrategicpartner.co.uk

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