Compliance in law firms after COVID-19

Compliance, Law - 20/10/2020

The UK is currently in a state of economic uncertainty. Unfortunately, whenever a period of crisis ensues, you can be sure that there’ll be people out there ready to exploit the situation. To put it bluntly, criminals who want to steal from businesses. Law firms in particular will need to be on the ball in terms of compliance. They’ll need to be on the constant lookout for warning signs of anything untoward. Things such as money laundering, or even terrorist financing.

The SRA (Solicitors Regulation Authority) has released new guidelines and information surrounding the challenges of money laundering during a global pandemic. Here are a few things you’ll need to watch out for.

Pressures around customer due diligence.

Lawyers will likely find themselves having to venture into legal realms outside their usual expertise. As more firms offer more pro bono services to help during the pandemic, it’s important to stay alert to anyone who might be trying to take advantage.

Firms may also find themselves with an increased number of instructions coming in. Whilst this is fantastic for business, there might be pressure to work faster to churn through the workload. Working under pressure can be bad for compliance. This is the time when things get missed. Have systems in place to manage periods of high pressure to ensure that you don’t get caught out.

Make sure you’re up to speed on identity verification.

During the last six months, a number of firms have introduced virtual ways of running their identity verification checks. There’s been a number of changes around what firms can and can’t do when it comes to verifying a customer’s identity. The SRA have provided a link to detailed guidelines around this. Firms need to be confident that the technology they choose is fit for purpose; does it definitely provide the assurance needed? During the last six months, a number of firms have introduced virtual ways of running their identity verification checks. There’s been a number of changes around what firms can and can’t do when it comes to verifying a customer’s identity. The SRA have provided a link to detailed guidelines around this. Firms need to be confident that the technology they choose is fit for purpose; does it definitely provide the assurance needed?

Due diligence has a part to play here. If you’re running into clients who are in any way resistant to these checks, it’s a massive red flag.

There are a number of laws under review when it comes to identity technology throughout the UK. You can find the latest government guidance here. It’s hoped that this change in legislation will make digital identity verification technology as widely accessible as possible.

Training is imperative.

Firms have been required to dig out and dust off their existing operational policies when it comes to compliance (and everything else). Inevitably, updates will need to be made. If any of your policies change, remember to carry out a refreshed risk assessment to coincide with it.

New technologies, client confidentiality and increased levels of cybercrime are all issues requiring regular training. Your policies in this regard should be actively in use. Any other approach is likely to result in compliance related problems.

While training may seem time consuming, it’s absolutely essential for maintaining standards of compliance, particularly during periods of increased attempted criminality. Whether you carry this out virtually or face to face, ensuring your teams are up to scratch on your latest policies is invaluable.

Having worked in and with firms for many years, we know the immense pressure that falls on solicitors. It’s easy to see how things can start to slip through the cracks. The bottom line however, is that they can’t. It’s crucial that you remain vigilant. 

Numero is here to help you balance the books and stay up to date on the latest compliance. If you have questions for us, please get in touch and we’ll be happy to discuss this further.