Client care in times of COVID-19

These are stressful times for all of us. As everyone is scrambling to reorganise themselves and get work done, forward thinking may well take a back seat. As it becomes more and more evident that COVID-19 will continue for some time, having a strategy in terms of client service is essential.

Below are some points you may wish to consider when it comes to maintaining good levels of client care:

Updates

Keep clients and potential clients updated via your website. Explain what they can, and cannot, expect during this period in terms of operating arrangements. Things will change from day to day and your website is a great means of updating people, as are social media channels such as Twitter and LinkedIn. Explain to clients, for example, what your arrangements will be if their fee earner is sick. Manage expectations in terms of the fact that there may be breaks in service. 

Manage expectations of existing clients. Maintain contact on individual files, even with holding emails.

More broadly, you should also consider how best to inform clients so they are aware work is happening outside the office and what safeguards in respect of confidentiality you have put in place. This gives clients the opportunity to raise objections if they have concerns.

Identify service areas most likely to be severely impacted

If you have not already done so, consider doing a “heat map”. Think about the legal services that you offer, and which will/could be most affected during this period. For each firm this will be different. Focus your business continuity planning on the areas most severely impacted.

Client lifecycle

Consider at what points in the lifecycle of different work types the service to the client is going to be most impacted and what you can do to mitigate that impact. It may be that on-boarding is one of the greatest points of impact. Are there other ways that you can “meet” clients, e.g. via Facetime, Skype or Zoom, to enable them to have the experience of meeting you without being in the same room. If you rely on documentation for AML, could you switch to electronic identification? We need to be aware that criminals will continue to exploit the situation.

Identify areas that may experience increased demand

Think about any services you provide that might experience a surge in interest. Do you have the capacity to manage a surge? You might want to contact commercial clients and explain how you can help them through this time. You might also need to determine your policy on declining new instructions if circumstances mean you do not have the capacity to take on more work.

Complaints handling

If you experience significant numbers of absences (even from remote working), consider whether you will be able to deal with complaints effectively. Again, the issue is about managing expectations. If those investigating complaints cannot access files remotely, how could you get files to them? Keep complainants informed and LeO, where matters have been referred to them.

Keep updating your plans as circumstances change

Senior managers should confer very regularly to monitor the impact of the virus and to keep staff informed of the actions the firm is taking.

Manage your risk

In times of stress and where large numbers of staff work remotely, there is a risk that compliance standards may drop. Concern has already been expressed about the mental and emotional impact on staff of new ways of working in response to the virus, e. g. the challenge of working whilst looking after children at home and caring for sick family members. Keep reinforcing the “business as usual” message in terms of compliance with internal policies and offer points of contact for queries and reassurance.

Record your decisions

The SRA have said that you should keep records of the actions that you are taking to ensure compliance and manage your firm’s exposure to risk. It may become vital for you to proof at a future point that you have thought about the issues and taken appropriate action.

Remember, you are not alone. Our team of compliance specialists is here to help you through this. Call or email us if you require assistance, such as:

  • advising on your firm’s new risk management measures and preparing a detailed record of the changes you have made to the way you operate and how compliance risks are being managed;
  • contingency planning – helping you determine your response to the virus;
  • producing communications for your employees and clients;
  • support for staff who are working from home and need guidance on internal policies and procedures;
  • remote training on data protection and confidentiality, anti-money laundering and the SRA Standards and Regulations in the context of remote working;
  • remote file reviews and other compliance checks;
  • assisting with practical risk management.

 

COVID-19 – Advice for safe home working

As the UK Government moves to slow down the spread of the COVID-19 virus and following yesterday’s guidance, many of you will now be asking your staff to work from home or are looking to introduce increased home working.

It is of course important that any devices used for remote access are password protected and encrypted, with a fully updated anti-virus system in place and up-to-date security software.

At the same time though, in what are unsettling and stressful times for everyone, staff may easily overlook basic data protection and security measures.

Clear plans should be put in place to ensure that staff and their managers communicate effectively and appropriately. As part of this, you may wish to issue a reminder to staff of your firm’s relevant policies. This would typically include your data protection, confidentiality and ICT policies (and, if applicable, use of own devices policy). You might want to re-circulate these policies to staff and ask them to confirm that they have read them.

We suggest that you also re-emphasise the importance of maintaining client confidentiality and data security and remind staff that:

  • telephone calls with clients should not be capable of being overheard;
  • any documents printed out must be shredded (and printing should in any event be kept to a minimum);
  • secure connections must be used for accessing your systems;
  • the firm’s information should only be stored in the designated area and documents should not be stored on staff members’ own devices (unless previously permitted with appropriate safeguards);
  • they should ensure information is properly backed up;
  • the firm’s information remains the property of the firm at all times, no matter what format it is in, where it is stored or how it is accessed.

Criminals are trying to benefit from the current situation. There has already been an increase in phishing attacks. We therefore strongly advise against mixing work and personal activities on the same device. Staff should be particularly careful with any e-mails that make reference to the Corona/COVID-19 virus and be reminded to be extra vigilant and to look out for phishing e-mails and scams as attackers are trying to exploit the situation. Even if an e-mail appears to come from a known and trusted source, if there is any doubt over the authenticity of the request, it is best to verify it via other means first and not to click on any suspicious links or open attachments.

Remind staff to be very suspicious and verify the authenticity of

  • e-mails from people they don’t know, especially if they ask to connect to links or open files;
  • e-mails that create an image of urgency or severe consequences;
  • e-mails that appear to come from a known and trusted source but ask unusual things.

We also recommend that you consider your obligations regarding your insurance as you may need to notify your insurer of the change to your working arrangements.

Please do not hesitate to get in touch if you would like further advice. We will continue to remain at your disposal should you need assistance. In the meantime, we hope that you, your colleagues and families stay safe and well.

City firm rebuked by SRA over AML training failures

Top 50 firm Withers LLP has been rebuked by the regulator after failing to adequately train staff in anti-money laundering measures.

The Solicitors Regulation Authority said the firm failed between June 2017 and October 2019 to ensure employees were given regular training to recognise and deal with potentially suspect transactions.

A decision notice published today states that the SRA asked in 2018 whether staff had been trained in money laundering, terrorist financing and transfer of funds regulations in the previous year. New regulations had come into force the previous year and all firms were obliged at that stage to train staff about them. It was established that just two-thirds of relevant employees had been trained by the end of 2018. The training of the remaining one-third was completed by early October 2019.

When the SRA brought formal allegations, Withers confirmed that employees had been made aware of regulations as part of a wider review of policy, but training had taken ‘longer than anticipated’.

The firm has admitted its failing and accepted it breached SRA rules to comply with regulatory obligations, maintain public trust and train workers to maintain an appropriate level of compliance.

Opting to rebuke the firm rather than pursue any financial penalty, the SRA said the agreed sanction was a ‘proportionate outcome in the public interest’, creating a credible deterrent to other firms and showing the risk of not providing adequate training.

The SRA said there was no evidence of lasting harm to third parties, the breach had been remedied and there was a low risk of repetition. Withers’ early admissions were also taken into account.

The firm said it did take some other steps to make relevant employees aware of the relevant anti-money laundering legislation, and has now trained all relevant employees.

The firm has also agreed to the publication of the notice and to pay £1,350 costs.

(The Law Society Gazette, 16 March 2020)

We provide regular tailored AML training to staff at different levels and support MLROs with independent auditing. Please click here for further information.

Get ready for AML swoops – SRA

The Solicitors Regulation Authority is ’chasing a number’ of law firms which have failed to disclose the safeguards they have implemented to combat money laundering, after the regulator ordered them to do so by letter last December.

A rolling monthly programme of anti-money laundering spot checks on firms will be undertaken this year, Colette Best, the SRA’s director of anti-money laundering, told the Law Society’s annual risk and compliance conference in London this morning. The spot checks will involve the regulator calling in a batch of firms’ anti-money laundering risk assessments, with additional details likely to be required concerning a firms’ AML procedures and controls.

Where the regulator does call on a firm, she said, it will interview the firms’ relevant compliance officers, the MRO and MLCO. Best stressed that the SRA is comfortable with the same person performing both roles.

Amasis Saba, chair of the Law Society’s AML taskforce, urged firms to consider the number of suspicious activity reports they have submitted over the last 18 months. Firms need a plan to explain to regulators where their numbers are low, or they risk not being considered to be taking their responsibilities seriously, he said.

(The Law Society Gazette, 13th March 2020)

Fifth directive means firms need to review their anti-money laundering processes

The fifth Anti-Money Laundering Directive means law firms have to make changes to the way they work to help keep the proceeds of crime out of legal services.

Around 7,000 of SRA-regulated firms are captured by the Government’s changes to the regulations and will need to re-assess their processes – making any necessary changes immediately.

The Legal Sector Affinity Group (LSAG) – which includes us and all of the legal sector supervisors named in the regulations – is publishing a summary of changes to the regulations to help firms comply with the new requirements.

This includes:

  • a duty to collect proof of registration for entities (eg trusts and companies)
  • a duty to inform the registry of any discrepancies in their information
  • changes to client due diligence and enhanced due diligence

LSAG is currently drafting updated guidance on the regulations. This will require the approval of Treasury and will be made available in the coming months.

There has been a short lead in time between the regulations being laid in Parliament on 20 December, and the legislation coming into force. However, the legislation requires firms to be compliant from today. The SRA have said today that they will take the limited time that firms have had to prepare for the new requirements into account in our enforcement work.

Paul Philip, SRA Chief Executive, said: “Money laundering supports criminal activity such as people trafficking, drug smuggling and terrorism. The damage money laundering does to society means that every solicitor must be fully committed to preventing it. The vast majority would never intend to get involved in criminal activities, but the reality is that poor processes can open the door to money launderers.

“This new legislation aims to further reduce the risk of law firms being used to launder money. Working with the Legal Sector Affinity Group, we will be providing a range of support to firms to help them comply.”

SRA review shows fifth of law firms fail on money laundering compliance

  • Fifth of firms reviewed don’t have required firm risk assessment
  • 7,000 firms will be checked for compliance
  • New annual Risk Outlook highlights 172 money laundering investigations this year

The SRA today announced increased checks on law firms after it was found that too many were not complying with anti-money laundering regulations, and warned of strong action against those who continue to fall short.

In March, the regulator wrote to 400 firms asking them to demonstrate compliance with the 2017 Money Laundering Regulations by sending their firm risk assessments. They received 400 responses, but 21 percent (83) were not compliant, either not addressing all the risk areas required (43), or sending over something other than a firm risk assessment (40) – for instance, a client or matter risk assessment.

The majority of firms (64%) were using templates. These firms’ risk assessments were generally of lower quality. Templates can be helpful, but too many firms appeared to take a ‘copy and paste’ approach, without thinking through the specific risks and issues faced by their firm.

The SRA also expressed concerns that many of the risk assessments (135 or 38 per cent) were dated recently. Although this could reflect an update of an earlier assessment, this suggests some firms may have only created one in response to the SRA’s request and therefore some firms may not have an existing risk assessment.

The SRA have highlighted  their concerns in an updated warning notice and said that they will be engaging with firms to make sure they comply promptly. If they do not, they will face enforcement action.

The SRA will shortly be writing to the 7,000 firms that fall under the scope of the Money Laundering Regulations to ask them to confirm they have a firm risk assessment in place. An extensive programme of targeted and in-depth visits to firms will also be carried out.

Paul Philip, SRA Chief Executive, said: “Money laundering supports criminal activity such as people trafficking, drug smuggling and terrorism. The damage money laundering does to society means that every solicitor must be fully committed to preventing it. The vast majority would never intend to get involved in criminal activities, but poor processes open the door to money launderers.

“A call from us should not be the prompt for a firm to get their act together. You need to take immediate action now if you are not on top of your money laundering risks. Where we have serious concerns, we will take strong action.”

Figures released in the SRA’s annual Risk Outlook show that so far this year 172 investigations linked to anti-money laundering compliance have been opened. In the last five years, the regulator has taken more than 60 such cases to the Solicitors Disciplinary Tribunal, resulting in more than 40 solicitors being struck-off or suspended.

The Outlook also highlights that new EU money laundering regulations are due to come into force by 10 January 2020. This will mean firms need to update their processes to bring them up to date with the new legislation.

Money laundering is one of the nine priority risks for the legal profession in the SRA’s annual Risk Outlook. Other risks highlighted include solicitors getting involved in dubious investment schemes, and the risks of losing information or money to cybercrime.

SRA to conduct widespread checks and visits to firms amid concerns over ‘cut and paste’ approach to AML

SRA concerned at firms’ ‘cut and paste’ approach to AML

(The Law Society Gazette, John Hyde, 29 October 2019)

Thousands of firms are to be contacted by the Solicitors Regulation Authority within the coming weeks asking what measures they have in place to combat money laundering.

The widespread checks on 7,000 firms that fall under the scope of money laundering regulations follow fears that many are doing little or nothing to meet their obligations.

In March the SRA wrote to 400 firms asking them to demonstrate compliance with the 2017 regulations by sending their risk assessments. Of the responses, 83 were found not to be compliant: firms either did not address all the risk areas required or they sent over something other than a concrete risk assessment.

It was found the majority of firms (64%) were using templates, many of which were of low quality. The SRA believes too many firms appear to take a ‘copy and paste’ approach without thinking through the specific risks and issues they individually face.

The regulator is also concerned that around 135 of the risk assessments were dated recently, suggesting either that many firms had coincidentally updated their assessment in recent weeks, or they had only created one in response to the SRA’s request.

As well as writing to the 7,000 at-risk firms, the SRA now plans an ‘extensive’ programme of targeted, in-depth visits to firms and calling in more firms’ risk assessments.

Paul Philip, SRA chief executive, said: ‘Money laundering supports criminal activity such as people trafficking, drug smuggling and terrorism. The damage money laundering does to society means that every solicitor must be fully committed to preventing it. The vast majority would never intend to get involved in criminal activities, but poor processes open the door to money launderers.

‘A call from us should not be the prompt for a firm to get their act together. You need to take immediate action now if you are not on top of your money laundering risks. Where we have serious concerns, we will take strong action.’

Figures released in the SRA’s annual risk outlook, published today, show that so far this year it has opened 172 investigations linked to anti-money laundering compliance. In the past five years, the SRA has taken more than 60 such cases to the Solicitors Disciplinary Tribunal, resulting in more than 40 solicitors being struck off or suspended.

The regulator has highlighted its concerns in an updated warning notice and says it provides additional support including guidance, checklists and a suggested template for how to frame compliance methods.

New EU money laundering regulations requiring firms to update processes are due to come into force by 10 January 2020.

Recognising needs early is key for firms helping disabled consumers

New research has revealed what solicitor firms could do to improve access to their services for people with mental or physical disabilities.

And it found that early identification of needs and adjustments was vital if those with disabilities were to access legal services via solicitors. Commissioned by the Solicitors Regulation Authority (SRA), the research was undertaken by YouGov.

It saw more than 3,500 disabled people sharing their views on the challenges they face, and the reasonable adjustments firms could make to help them overcome these. More than half of those interviewed said they found accessing legal services difficult, with only one in four ever remembering being proactively asked if they need any reasonable adjustments to be made.

This problem is particularly acute for those whose disabilities are not immediately obvious, many of who say they lack the confidence to make requests themselves for information or services to be offered in a different way.

Once disabled people had hired a solicitor, their impression of the service was generally positive, with the most important factor influencing this being the attitude and flexibility of frontline staff working for a firm.

Key improvements the research suggested firms could make to be more accessible to disabled people included:

  • Proactively asking all clients if they need any reasonable adjustments to be made, with examples of what form these may take.
  • Introducing easier-to-navigate and more accessible websites, with dedicated information for those with disabilities.
  • Adding pictures of their offices on their website, to help people feel familiar with them and judge how accessible they will be before visiting.
  • Train staff in supporting vulnerable clients, and actively promote any relevant expertise, partnerships or accreditations.

SRA Chief Executive, Paul Philip, said: “All solicitors will recognise that disabled people often have multiple, complex and varying needs, that may not be immediately obvious. Accessing legal services can be complex enough without facing such added challenges, which is why it is so important that firms do all they reasonably can to help people overcome any difficulties.

“This research found that while some firms are clearly good at this, others have more to do. The insights should help firms to make the changes needed to support hundreds of thousands of people to access professional legal support when they need it.”

In compiling their research YouGov surveyed more than 3,500 disabled people through a combination of online surveys, one-to-one interviews and online forums. A workshop was also held with charities and stakeholder groups, alongside a review of existing literature published in this area.

Solicitors and law firms have duties under the Equality Act 2010 and the Code of Conduct to treat people fairly and without discriminating against them on the grounds of characteristics including disability.

Read the research on Reasonable adjustments in the provision of legal services.

New solicitors’ protocol for property transactions

The 2019 edition of the Law Society Conveyancing Protocol is out, with details on best practice in residential conveyancing transactions of freehold and leasehold property.

“The protocol is a tool which helps conveyancing solicitors to achieve most effectively the transfer of residential property. It aims to provide consistency across transactions and improve efficiency,” said Simon Davis, president of the Law Society of England and Wales.

“It has been adapted to ensure continued relevance for practitioners. This includes the new Law Society Code for Completion prepared following the Court of Appeal decision in Dreamvar.”

The new protocol aims to take account of the ever-increasing complexity of stamp duty land tax (SDLT) and the work of HM Land Registry to reduce requisition rates. It includes reminders to address issues early in the process which might otherwise create delays, such as restrictions in leases, and also contains new provisions in relation to lease terms.

“The Law Society is committed to providing support, advice and guidance to solicitors in all areas of relevant practice, in the best interests of clients and the public,” added Simon Davis.

The 2019 edition of the Protocol will take effect from 19 August 2019.

Read the Law Society Conveyancing Protocol

Find out more about Dreamvar

SRA probes 26 firms over money laundering

Almost half of firms placed under extra scrutiny by the Solicitors Regulation Authority for potential money laundering breaches could now face disciplinary proceedings after alleged failures were exposed.

Paul philip 16

Paul Philip: ‘compliance is not optional’

The regulator reviewed 59 firms that provide trust and company services – seen as a particular risk for criminals laundering money – and is now investigating 26 for possible rule breaches.

The review found no evidence that firms had actually laundered money or that they had any intention of becoming involved in criminal activities. But red flags were raised at more than a third of firms under review about their lack of adequate risk assessment. In four cases, firms had no risk assessment at all.

While 15 firms had turned down work following due diligence, a similar number were found to have inadequate processes in place to manage risks around politically exposed persons (PEPs), individuals whose prominence in public life could make them vulnerable to corruption.

SRA chief executive Paul Philip said: ‘Most solicitors take their responsibilities seriously, but too many firms are falling short. Those firms should be on notice that compliance is not optional. They need to improve swiftly. Where we have serious concerns that a firm could be enabling money laundering, we will take strong action.’

The SRA’s message has been repeated several times in recent years, but the prospect of sweeping prosecutions involving dozens of firms is intended to drive home the message that action is required.

The net is set to be cast wider in the coming months, with the regulator beginning a further compliance review of 400 firms, led by a new dedicated anti-money laundering unit.

Around 7,000 firms do work that falls under the scope of the government’s money laundering regulations. In the past five years, 60 cases have been brought before the tribunal linked to potential improper money movements, with more than 40 solicitors struck off.

A Law Society spokesperson said: ‘The SRA’s findings will help us pinpoint those elements of the regulations that members still find challenging and tailor our support services to member needs. The findings also help members understand and prepare for the level of detail that the SRA clearly expects to see in firms’ compliance procedures.

‘Chapters 2, 3 and 4 of the legal sector AML guidance deal with most of the challenges identified by the thematic review. Where a specific question is not answered by the guidance, members should call our Practice Advice Service for free and confidential advice.’

(Source: The Law Society Gazette, 13th May 2019)