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Thousands of Firms Still Failing to Fully Comply With Transparency Rules
November 9, 2023

 1. Introduction: Firms Still Failing to Meet Transparency Requirements

The transparency regime, initiated by The Solicitors Regulation Authority in 2019, aimed to enhance openness in the legal sector by requiring firms to disclose specific information. However, according to a recent article in the Law Society Gazette, many law firms are still not fully complying with the transparency rules set out by the regulator. A Year Three evaluation of SRA Transparency Rules, carried out by independent consultancy Economic Insight Limited, found that only 42% of firms claimed to publish all the information required by the regulator.

i. Compliance Challenges:

  • Only 42% of firms claim to publish all the necessary information per the SRA’s requirements.
  • Higher compliance rates were reported for specific aspects, such as displaying price and service information, the SRA’s clickable logo, and details of complaints procedures.

ii. Success and Challenges of the Transparency Regime:

  • Despite a low overall compliance rate, the SRA considers its transparency regime successful.
  • The report indicates that individuals and small to medium-sized businesses actively compare price and service information before choosing a legal services provider.
  • The SRA acknowledges that areas for improvement include providing more precise guidelines on presenting cost information and more examples of best practices and templates.

iii. SRA’s Response and Future Considerations:

  • The SRA actively monitors compliance levels and supports firms needing improvements.
  • Action taken against firms wilfully failing to adhere to the rules, including fixed penalty fines.
  • The report suggests the regulator might explore extending transparency requirements to other areas of law for broader application.
  • The SRA believes that compliance with this requirement might also increase if it were to apply to all firms (rather than by exception).

You can read the full article here.

 2. Firms Must Take Action

As the SRA continues its commitment to scrutiny and improvement, firms are urged to address compliance gaps to avoid penalties. We have recently seen a steady influx of firms contacted by the SRA with warnings on areas lacking full compliance with fee transparency and complaints procedures. Do not allow your firm to be one of those caught out!

 3. Transparency Rules – The Requirements

The SRA Transparency Rules have been in force since 2018, but many firms have needed help to get to grips with them and deliver, onto their websites, a fully compliant pricing structure.

To assist firms in getting their fee transparency pages right, we highlight a few key areas below:

i. Service Areas that require a fees transparency page are:

  • Conveyancing (residential) (be sure to include sale, purchase, and re-mortgage – on both leasehold and freehold if different)
  • Probate (uncontested)
  • Motoring offences (summary offences)
  • Immigration (excluding asylum)
  • Employment tribunals (unfair/wrongful dismissal)
  • Debt recovery (up to £100,000)
  • Licensing applications (business premises)

ii. Information on costs and services:

  • Provide the total cost for each service and, if not possible, a range of costs. Ensure that you state both the price net and gross of VAT.
  • Make it clear what your hourly rates are and when they will apply.
  • Detail obvious disbursement and their amounts and also include the price net and gross of VAT. You should also include typical costs if exact fees are not available, such as for council or interpreters. We have seen firms criticised when this information is not provided.
  • You should provide the details of the fee earners likely to deal with the work in a particular category and their supervisors or who has overall supervision. Confirm their qualification and experience via a summary of expertise and experience. Links to complete profiles could be included.
  • Where you offer conditional fees of Damages Based Agreement, explain when a client will be required to make payment of costs.
  • Detail the services included in your fixed price or range of prices.
  • Where possible, highlight any obvious services that would not be invaded in the fixed pricing.
  • Identify key stages of each matter and the expected time it will take for the matter to be resolved. Where possible, provide a time scale for each stage.

Getting this right is essential. Not having the price information on your website (and other requirements) clearly indicates a firm’s ability to comply. An enquiry about this may lead to a broader enquiry and more questions.

 4. Compliance Solutions

At The Strategic Partner, we work with firms on a range of risk and compliance matters, providing essential support and delivering for them a robust risk and compliance strategy that will include price transparency.

Price Transparency Review – The Strategic Partner’s compliance team will review your website for a fee of £250.00 plus VAT (£300.00 Inc. VAT) and provide you with a written report that:

  • Highlights any issues you may have.
  • Advises the action to take to rectify any errors.
  • Provides a technical follow up call to discuss the findings and recommendations.
  • We can also work with you to implement the changes if required as an additional service.

Our expert and dedicated compliance officers are here to assist you and your firm. To organise your review, you can call us on 0203 911 9710 or email us at info@thestrategicpartner.co.uk.

5. How Confident Are You About Compliance?

The Strategic Partner is a law firm knowledge hub. We work with both law firms and professional indemnity insurers, advising and guiding on risk management techniques to assist and reduce instances of errors or regulatory breaches.

If you believe your firm may be at risk or wish to confirm your firm is achieving the required standard, we offer a range of solutions at The Strategic Partner.

  • Regulation 21 AML 2017 Independent Audit– A review of the firm’s approach to regulation and compliance to include AML procedures with the audit meeting the requirements of Regulation 21 of the AML 2017. The output of this provides the firm with a written gap analysis and solutions to remedy any issues that arise and ensure the firm is compliant. Find out more

Training– Our typical AML Training includes:

  • AML Training for ALL staff to meet the firm’s obligation to provide annual training.
  • 1-2-1 training for the MLRO and MLCO on their obligations and requirements.
  • Practical training for those involved in client onboarding to ensure their ID and AML checks are correctly completed.
  • File Reviews/Auditing – At TSP, we engage with firms undertaking file reviews where we consider procedure, staff, systems, and files to ensure the procedures are up to the required standard and being implemented at the case level with a report of the outcome.

Our packaged risk and compliance solutions provide guidance and support to firms on a range of topics and include: –

  • Our Risk, Regulation and Compliance Service (including AML) provides firms with the necessary Policies, Control and Procedures (PCPs) – in line with CQS requirements and the standard of the relevant quality mark – alongside training, supervision structure, an annual independent assessment and reporting. This solution ensures firms and their staff are compliant and remain there. It also clarifies what to do if a mistake and/or a breach occurs.
  • Our extended service, Risk, Compliance, AML Guidance and Register Administration, provides an outsource solution for firms where The Strategic Partner not only manages and maintains the risk registers and provides guidance to all staff (inc. Partners), but we also produce monthly risk and compliance reports.

The combination of these two solutions provides a law firm with a robust and cost-effective risk and compliance strategy that ensures staff have access to expert guidance as it is needed.

6. Get in Touch With Our Compliance Team

We would be pleased to discuss your current approach to regulation and compliance and how our services will assist you in ensuring your firm is protected.

Contact our team today at 0203 911 9710, email us at info@thestrategicpartner.co.uk or make an online enquiry here to request your transparency fee rules review.

 

View and download the PDF version of this article here.

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