A regulatory wish-list

Only six sleeps until Christmas, and the Christmas party season is in full swing. It goes without saying that with the disruption and unprecedented difficulties we all faced with the Covid-19 pandemic, and the challenging times we continue to find ourselves in, this festive period is a welcome opportunity for many to re-connect and, frankly, switch off from the pressures and worries of current everyday life.

Recently we blogged on the Solicitors Regulation Authority’s (“SRA”) regulatory remit, and how all those who work in law firms, not just lawyers, are liable to sanction by both their employer and the SRA for acts of misconduct. We set out below some pointers for law firms and those working within them to keep in mind this Christmas to ensure a much needed merry, yet compliant, festive season.

Are you aware of the latest SRA guidance?

In recent times, one of the SRA’s focus areas has been workplace culture and the need to protect and support colleagues. In its resulting guidance, published 7 February 2022, the SRA makes clear that while it does not “direct the working practices or procedures that firms should adopt” it will take action where there has been a serious regulatory failure, for example where the work environment “creates a culture in which unethical behaviour can flourish or where staff are persistently unable to raise concerns or have issues addressed.”

The SRA expects law firms to do “everything they reasonably can to look after their staff’s wellbeing in the workplace; to protect staff from bullying, harassment, discrimination and victimisation, while supporting their staff so they can work safely and effectively.”

It is a sad but true reality that the holiday season sees an increased risk of regulatory issues arising, particularly with alcohol thrown into the mix and the potential for private and professional boundaries to become blurred. The SRA’s guidance on Sexual Misconduct, published 1 September 2022, specifically references firm Christmas parties as an example relevant consideration when assessing the proximity of sexual misconduct to professional practice and, in turn, the need for regulatory action.

As touched on in this guidance, in a post-Beckwith world, how those within the SRA’s regulatory remit conduct themselves in private is evermore under the radar; sexual misconduct entirely outside of practice and not directly related to the practice of the individual might warrant a regulatory response if sufficiently serious. The SRA has made clear in its Enforcement Strategy that allegations of sexual misconduct are viewed very seriously and its guidance on Sexual Misconduct sets out its expectations for firms to have robust procedures and policies in place to properly manage and investigate such complaints when they are made. The Enforcement Strategy emphasises that the SRA’s principles - the fundamental tenets of ethical behaviour it expects all those it regulates (including non-lawyers) to uphold – apply at all times and in all contexts, both in and outside of practice (as the context permits).                                      

The key takeaway message is that it is crucial that law firms create a safe environment for their people, both in and out of the office when it comes to law firm festive celebrations, and that all those working in the firm should be mindful as to their conduct in both a private and professional setting. A close review and refresh of the SRA’s stance in the above guidance notes is recommended so that such messaging is front and centre going forward.

Are all relevant policies and processes up to date?

A regular gap-analysis by those responsible for regulatory compliance at firm level of all relevant policies, including guidance on Alcohol Use and Policy Statements setting out Firm Values, is a necessary exercise, particularly at this time of year. Law firms will need to ensure a safe environment where individuals feel able to speak up and report inappropriate conduct, and know what is, and is not, tolerated.  

Striking the right balance with internal communications

Any messaging on this topic at this time of year is always challenging. How do you promote the need to exercise caution and behave in accordance with your firm’s expectations without undercutting the joviality and freedom the festive season affords?

A balanced, separate but well-timed communication on complying with the firm’s relevant policies and guidance documents should be considered (see our recent blog for the serious potential outcomes for non-lawyers by way of example). A carefully worded reminder may well be a good way to protect the firm and all those working within it at all levels, and at all times.

Understanding your reporting obligations

Unfortunately, notwithstanding all the rules, systems and processes a firm puts in place, misconduct can arise. It is greatly important that all those in a law firm understand their obligations to report (where applicable), how to report any concerns, to whom and what happens subsequently (including regulatory implications).

The year ahead

The pointers set out above are, of course, relevant all year round and applicable to any firm celebration.

Looking forward, next year law firm managers are set to have a new regulatory obligation to challenge colleagues who they see treat others unfairly and without respect. The SRA is due to issue corresponding guidance setting out the action it may take where unfair treatment occurs in settings other than the delivery of legal services but only where that behaviour touches on the practice or standing of the profession in a way that is demonstrably relevant. This is an area to keep under close review and one which will likely require additional training in the coming year.

FURTHER INFORMATION

If you have any questions or concerns about the content covered in this blog, please contact Charlotte Judd or a member of the Regulatory team.

ABOUT THE AUTHOR

Charlotte Judd is a Senior Associate Solicitor in the Regulatory Team. She assists and advises on matters predominantly in three of the Team’s core service areas: 1) Advising Solicitors and Law Firms; 2) Defending Accountants and Accountancy Firms; and 3) Advice for Regulators and Public Bodies.