Authors:Vicky Ling
Last updated:2023-11-08
Regulation of solicitors in the not-for-profit sector – all change?
Marc Bloomfield
Will the introduction of new standards mean different working practices or carrying on much as before?
There can be few people in the legal world who are unaware that the Solicitors Regulation Authority (SRA) has issued new standards and regulations that apply from 25 November 2019. All solicitors must comply with the SRA Principles and the SRA Code of Conduct for Solicitors, Registered European Lawyers and Registered Foreign Lawyers (known as the Code for Individuals). In addition, there is a Code of Conduct for Firms, for entities that are authorised and regulated by the SRA. Most not-for-profit (NfP) organisations that employ solicitors are not authorised or regulated as entities by the SRA, so the Code for Firms does not apply to them. However, in order to comply with your individual requirements under the Code for Individuals, it is necessary to ensure that there are appropriate systems in place within your NfP organisation.
Exercise judgement
The SRA has emphasised that solicitors must exercise judgement in applying the seven principles and standards in the Code for Individuals to particular situations and in deciding on the best course of action depending on the circumstances.
The Code for Individuals is not prescriptive in relation to the way the standards of professionalism are to be applied. This is different from the previous approach. For example, in The Law Society’s 1999 Guide to the professional conduct of solicitors, in force before the SRA was created, there was a detailed list of circumstances that overrode the requirement to keep the affairs of clients confidential. In contrast, the Code for Individuals simply states that you must ‘keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents’ (para 6.3). This means that a solicitor needs to use their judgement to a far greater extent.
Although people are understandably concerned about the major changes that the new standards and regulations represent, in practice you may not need to change the way you work very much, if at all. The main impact of the SRA’s change in approach is that you will need to be familiar with the Principles, the Code for Individuals, the SRA’s approach to enforcement, and the updated (much simplified) Accounts Rules. One benefit of the changes is that client money no longer needs to be held in the name of a qualifying solicitor. You need to review systems and procedures to make sure you comply.
If you need to make a decision involving professional ethics, you need to be able to justify why you did what you did. I would always recommend that an experienced solicitor is involved in making such decisions and, indeed, many NfP agencies have a ‘senior solicitor’ or ‘head of legal practice’ role. It is advisable to keep records of any ethical decisions and any breaches, whether or not they are sufficiently serious to report to the SRA.
New not-for-profit guidance
Historically, the SRA has provided little guidance for solicitors on how to interpret the rules in NfP and pro bono settings. Encouraged by the Law Centres Network, Citizens Advice, LawWorks and others, the SRA has risen to the challenge and has issued guidance aimed at the sector and the practical issues that can arise. I was one of a small team who worked on the guidance with the SRA.
The Code for Individuals describes the standards of professionalism expected of solicitors. It has seven areas that apply to all solicitors:
maintaining trust and acting fairly;
dispute resolution and proceedings before courts, tribunals and inquiries;
service and competence;
client money and assets;
business requirements;
conflict of interests, confidentiality and disclosure; and
cooperation and accountability.
Section 8 of the Code for Individuals applies only to solicitors who provide their services to the public or a section of the public (such as in Law Centres or advice agencies), and sets out requirements in relation to client identification, complaints handling, client information and publicity. The new NfP guidance provides a step-by-step guide to the requirements and some sample paragraphs that you can adapt to your organisation’s needs, depending on the way you operate, the services you offer, and the client groups you serve.