LSA DISTRACTING FROM NEW ACCOUNT RULES
11 Oct, 2011
Preoccupation with Tesco Law has distracted law firms from new Solicitors’ Accounts Rules, which came into effect on the same day, says Peter Noyce, Professional Services Partner of Menzies LLP (pictured).
“Obviously, firms do need to consider how ABSs and Tesco Law will affect them, and how they should embrace the challenge, but they need to comply with current regulations.
“From 6 October, the Solicitors’ Regulation Authority (SRA) requires all firms to have a Compliance Officer for Finance and Administration (COFA). This person has a duty to report to the SRA ‘any breaches of the accounts rules’ as soon as reasonably practicable.
“Finance departments and cashiers of many legal firms are not considered top priority when it comes to training and personal development. This can often be a mistake as Rule changes can arise without even being noticed. In our experience, law firm clients that regularly send their finance staff on courses tend to not be exposed to the more serious breaches when we come to perform Accountant’s Report assignments.
“Other changes introduced on 6 October include:
- Interest Rules: A requirement for the firm to have a ‘written policy that provides for a fair outcome’.
- Electronic signatures: The changes allow for an electronic signature to be the only form of authority for a withdrawal from a client account, as long as ‘suitable safeguards’ are in place.
- Overseas practices: The rules for an office outside of England and Wales are incorporated as part G.
- Damages monies: New rules 15(e) and 19(e) which deal specifically with receipts of money for damages and costs, received under the Law Society’s Conditional Fee Agreement, paid into client account with a requirement to transfer the ‘costs’ element within fourteen days.”
Menzies’ legal team is running three seminars in November – in London, Woking and Solent – to explain the amendments to the Solicitors’ Accounts Rules just implemented. The seminars will also cover merger and acquisition activity and tax planning opportunities.
For regular comment upon issues affecting the legal sector see the Menzies’ Legal Sector Network group on LinkedIn. For further information on the seminars please contact Susanne Richter on firstname.lastname@example.org