Regulation of Practice Committee
At a glance
Most common recurring issues with investigating accountants reports that result in referrals to the ROPC:
The Law Society acknowledges that it is difficult to get a good bookkeeper. However, relying on yourself or other unqualified staff to perform this function often leads to disaster. It should be your absolute priority to obtain a qualified and experienced bookkeeper. A bookkeeper will spot debit balances on the client account, credit balances on the office account, incomplete bank reconciliations and balancing statements, which is all in contravention of the regulations. Cumulatively these can cause serious problems for your practice and if not addressed can result in a referral to the LSRA.
The 2023 SARs now require that you carry out balancing statements every three rather than every six months. Good practice suggests you should carry out monthly client account reconciliations to identify any deficit, rather than waiting until balancing statements are completed. Deficits that appear in your reporting accountants year-end report will trigger an investigation by the Law Society, so regularly monitoring your client account for any deficits is the best approach to
Inactive balances arise when there has been no movement on the client account for over six months. There is often a reasonable explanation for this, such as fees held as a retainer, or pending another action on the file, but when a reporting accountant report lists many inactive balances, some going back years, it suggests that the solicitor does not have full oversight of the client account. If little attention has been paid to these balances over a number of years, the process of clearing them can take months to complete, so stay on top of them by regularly reviewing them.
The Law Society website contains helpful precedents to assist with s150 compliance. Always remember to include a narrative, setting out a summary of the legal service provided and include the dispute resolution procedure. Finally, send a copy of the bill to the client, and the barrister’s bill of costs, at the end of the case. Taking the time to ensure that your s150 precedents are compliant will avoid later problems.
When it comes to AML regulated services, solicitors must obtain identification documents for each client and satisfy themselves as to the source of the funds, documenting their thought process on the Client Risk Assessment Form.
Although there are services which are not AML regulated services, it is simpler to have all staff in the office look for the required ID documentation on every file as standard. Unlike compliance with the SARs, lack of AML compliance is a criminal offence so keep it clear and simple; every client - every file. There are two helpful, free, lectures on the Law Society website relating to AML. Consider having all of your staff watch this and then document this training as part of your business risk assessment.
Finally, consider reporting any suspicious activity to the Go AML website and ROS. If you are unsure of certain activity, it is best to report it.
