Some interesting bits from the SRA Conference yesterday on the SQE.
SQE 1 exams will be on 8th (FLK 1) & 11th Nov 2021 (FLK 2), 5 hrs exam each day (in 2 halves with an hour’s break between).
SQE 2 exams will be in April 2022
You will be able to see through the portal the SRA will set up:
SQE 1 will be at Pearson Vue Assessment centres in UK & internationally
The Oral for SQE 2 initially in Assessment Venues = London, Manchester & Cardiff
Will be sent to the candidate direct unless they are solicitor apprentices, where they will go to the training provider.
Can apply from Spring 2021 to have them registered with the SRA. More detail to come.
We provide an external QWE Confirming Solicitor service - to help out aspiring solicitors who do not have a solicitor to sign off their QWE, or firms that would rather outsource this. Here's a link: QWE - External Certification Service (hunningsconsultancy.co.uk)
Fee free to contact Ingemar on: 07887 524507 or [email protected]
SQE Implementation: https://www.youtube.com/watch?v=4kXI_jDqP-4&feature=youtu.be
How Providers & Firms are Preparing for the SQE: https://www.youtube.com/watch?v=GCI-1SI0ctQ&feature=youtu.be
Assessment Specifications and Functioning Legal Knowledge (FLK): https://www.youtube.com/watch?v=yreaCuDrd48&feature=youtu.be
SQE Monitoring and Maximising Diversity: https://www.youtube.com/watch?v=9SXN-ceI9dw&feature=youtu.be
Qualifying Work Experience (QWE): https://www.youtube.com/watch?v=LLXx0DCHqr0&feature=youtu.be
In unexpected announcement in late November 2020 the SRA's AML Practice Supervision Manager, Zoe Allen-Robinson, announced, in answer to a question from the audience at the annual SRA Compliance Conference, that it is now perfectly acceptable to charge for CDD / AML as long as the client is clear about the charge and it is the firms T's & C's. Up until less than a month ago SRA Professional Ethics written guidance on this issue was that the: "ordinary costs [of CDD /AML] should indeed form part of a firms overheads".
We wrote to the SRA for clarification and they have confirmed this. Below is the text of their letter.
“Dear Mr Hunnings
Charging for electronic client due diligence checks.
Thank you for your email of 27 November 2020.
Passing on the cost.
At the COLP/COFA conference last month our director of AML, Colette Best announced that the SRA are now agreeable to firms passing the on the cost of electronic client due diligence “CDD”. Historically we have viewed the costs of client due diligence as an overhead that should be borne by the firm. The cost will need to be clearly stated in the firm’s terms and conditions. This change in policy is on the condition that firms are completely transparent with clients about how much they will be charged before undertaking the due diligence. The cost should not appear on the client’s bill as a disbursement. It is important that clients are in the position that they are informed of and understand the cost in advance. (Paragraph 8.6 and 8.7 in the SRA Code for Solicitors, RELs and RFLs). This will enable them to instruct an alternative firm if they are not agreeable to the cost.
Electronic checks generally.
All firms carrying out work in the regulated sector must comply with Regulation 27 of the Money Laundering Directive and undertake client due diligence. On-line checks can be a very helpful support to firms. When deciding what provider to go with it is very important that the firm and all those using the system understand what it achieves and how it must be used. Some systems are quite complex and unless used properly will not be effective. All staff using the system must be fully and adequately trained in order to prevent inaccurate results. It is important that firms do not rely solely on external systems to undertake CDD and other more appropriate CDD identification checks are ignored. Any system chosen to support a firm must be appropriate for the client concerned. Paragraphs 4.3.2 and 4.3.3 of The Legal Sector Affinity Group Anti Money Laundering guidance sets out what you are required to do by way of CDD and some factors to look into when considering an electronic provider.
I hope you have found the above helpful. If you would like to discuss your query further
please do not hesitate to contact me on the number below.
Yours sincerely
Jane Allan (Solicitor)
Ethics Team Manager
Professional Ethics”
Should you want assistance with any compliance questions please do not hesitate to contact us: 07887 524507 or [email protected].
We can
We have a full suite of compliance support for solicitors ranging from OPM, to assistance with Lexcel & CQS, SQM applications, to bespoke compliance support or COFA support hotline retainer. We even provide a DPO service where you may buy what you need, which says you having to employ someone. Please have a look at our services in the drop down at the top of the pages in our website: https://hunningsconsultancy.co.uk/
This is a big step. You are moving from being an employee, drawing a guaranteed wage, to being a self-employed entrepreneur. We know from experience that often people are not adequately prepared. We can help.
We can go through with you the financial implications in detail. We can even help you with analysing the offer of partnership. We can also talk through broader business aspects of working with your new business associates who co-own the firm.
What is written above applies to people gaining an ownership share in a law firm in other ways, for example being invited to become a share-owning director or a member of an LLP.
All information will be held confidentially. We anticipate that this will be a service provided direct to the aspiring/new partner, but it could be provided to them at the request of the firm. As professionals we would anyway hold anything confidential. We are fine with signing an NDA. Our Contract anyway contains a mutual confidentiality clause.
(Non-UK: we can assist but may not be able to give such detailed advice on tax.)
Charges: £200/hr + VAT
To find out more contact us on 07887 524507 or [email protected]
Professional Indemnity Insurance - One for the top 3 expenses for a firm of solicitors. More than that – if you can’t get PII cover the consequences are catastrophic – you will either have a fire sale of the firm or you are looking at closing with run off. Given the importance of getting PII cover I’ve put down some practical tips.
I help new solicitors firms get PII cover and then SRA approval. I been talking to brokers to get a view from the insurers side for firms that are already up and running but are renewing their PII cover. Whilst in practice I worked with insures and feel that I have a reasonable idea of what they are looking for.
Insurers are a business like any other. They need to make a profit. They make their money by backing more winners than losers. They will want to have as much information as they can to allow them to set the premium at the right level so that they do not make a loss. At the same time, they must be careful not to set it so high that they lose the business to a competitor. For them the largest risk is that they get this balance wrong. Generally, they look at the pool of risk across the book they have written.
From the solicitor’s perspective, most law firms are not experts in the PII market; they are experts in the law. However, there are some things you can do to make yourself a more educated purchaser. It is such an important and expensive decision for you. I hope what is written below will give you tools to be able to do so better.
The market is much more difficult than it used to be, with many firms actually failing to get cover. Insurers say that they have been under-charging premiums over the last few years and so have been making a loss. The market has ‘hardened’ in their terminology. A 30% increase in premium was not uncommon in the October round. If renewing in April 2021, there is a good chance you were on an 18 month contract. The market now is very different from how it was in October 2019. You are also now very unlikely to be able to get anything more than a 12 month contract. In some circumstances insurers are asking partners to give personal guarantees that Law Firm Owners/Partners/Directors will honour their obligations in relation to run-off cover (some firms have been going bust without such cover, leaving the PII insurers to pick up the tab).
Number of Partners/Directors – each insurer tends to favour different size practices, so the broker should get the right fit. There’s no point in applying to an insurer that doesn’t really deal with firms of your size.
Fee Income - be as accurate as possible in declaring fee income. If there have been significant changes in fee income (either up or down), provide the reasons for this. The better they can understand, the more comfortable they will be that you are transparent and have a handle on your business.
Practice Area - Areas such as Conveyancing, Personal Injury and Private Client are classed as high-risk areas by insurers whereas areas such as criminal and family are considered low risk. (Personal Injury used to be classed as very high risk, but as the market has largely consolidated into specialists the risk is perceived as less.) Therefore, it’s important to accurately reflect your areas of practice as this will have an effect on your premium. Split of matter types, fees by matter type, profit by matter type and anything else that affects risk. If you do work in a high-risk area, you’re not without choice of insurer. It’s all about the detail of how you run your business.
Claims History - Prior to quotation insurers will want to see at least five years claims information. An insurer is not necessarily going to be turned off by the fact that you have had claims. They are interested in the circumstances of the claim and procedural changes you have made since to prevent a recurrence.
Risk Management - It‘s important to demonstrate that Risk Management is embedded within the culture of the firm. It’s a myth that having accreditations such as Lexcel, CQS, IIP etc automatically means lower PII premiums, but what it does demonstrate to insurers is that the firm is working towards a best practice standard. What they will want to see is that you walk the walk instead of just giving the talk.
Covid Crisis – its worth writing a bit just on this subject. This has been a challenge for all businesses. It raises risk questions - data management and security, staff health and business resilience to name just a few. It is common for insurers to be sending out an additional Covid questionnaire when quoting. Indeed, I’ve helped some of our client firms fill them in during tis autumn.
Brexit – I’ve not seen this yet, but insurers should be asking questions relating to how you have adapted to Brexit if any of your trade is with the EU.
Prepare well and early – well ahead of the renewal date your broker should advise you on what you should expect. If not, ask them. Agree deadlines with them around timeframes for matters such as proposal issue and production of renewal terms and ensure that where possible, these are met. I’d suggest start this at least 3 months before the renewal date. Insurers require a lot more information than at previous renewals. Many have introduced a COVID-19 questionnaire or at least COVID related questions (mentioned above). Requests for reports and accounts covering 2 years are common as Insurers check business resilience through the pandemic. Firms that carry out property related work are likely to be asked questions around any property development work that they may be involved with.
Proposal Form - prepare it well. It may have a big impact on your firm. Try to allocate the necessary time to complete the proposal and don’t rush it. Answer all questions fully, supplying as much information as possible and don’t attempt to conceal anything. Put into it the care you would do on one of your most complex matters. It is likely to have far more impact on profit and drawings for the partners than even your biggest case.
Should you obtain alternative PII quotes? It’s a common practice in most other areas of spend. If your broker approaches more than one insurer, will you have to complete more than 1 proposal form. Normally not, as the insurers will normally accept the brokers proposal form.
Choosing a broker – should be done with care. The broker should be your friend and guide in this market. Ask yourself how much your broker seems to care about you as a customer/client. The PII is such a significant spend. How much contact do they have with you outside of the PII quoting time? Are they interested in your business success? Whether you can get a quote and what the premium size will be will largely be determined by the nature and quality of your business. Are they helping you improve it? Some brokers are tied to certain insurers. Do you know if and to whom your current broker is tied? Going to too many brokers can be counter-productive, as they may/will approach the same insurers, who then wonder if you’re desperate and if there’s a problem. It might scare them off. If using more than one broker, you could allocate the market between them to avoid duplicated approaches to insurers.
We may be able to help you with the prep and indeed put you in touch with a PII broker who could give you a 2nd view. We regularly help solicitors with setting up a New Law Firm. Here’s a link to those services: https://hunningsconsultancy.co.uk/starting-a-new-law-firm-help-support/
Feel free to get in touch. 07887 524507 or [email protected]
This was published on 17th November 2020 by the Land Registry and launched on 12th March 2021. The aim is to promote the development of easy to use, modestly priced, remote and digitally secure options for conveyancers to use with their clients. Relevant for both Domestic Conveyancing & Commercial Property.
To reach ‘safe harbour’, the client must hold a form of evidence that can be checked by interrogating cryptographic security features within the evidence. Conveyancers must check that the evidence is genuine. The conveyancer must make sure the biometric information captured from a ‘liveness check’ matches biometric information in the chip within the evidence.
Property Lawyers representing a transferor, borrower or lessor must connect the client to the property by obtaining two examples from a set list of evidence, and check that the name and address matches the identity.
The standard is not compulsory and other means of identifying parties to a transaction can be used. However, Land Registry says it will not seek recourse for negligence if a conveyancer carries out all the requirements under the standard.
We provide a 'One-Stop-Shop' for Business Support for Law Firms and other Professional Services businesses. Everything to allow the busy partner to get on with the client work. While you're here, may we invite you to take a look at our services & compliance in the drop down menus above. Should you not see what you're looking for then please ask. We will build around what you need. 07887 524507 or [email protected].
How’s Business? As so often happens, the idea of this article came from a conversation. On this occasion it was from a conversation with a new contact on LinkedIn. I normally try to have a chat with a new LinkedIn contact so that we learn a little about each other and our businesses.
So, what do you think of when I ask ‘How’s Business?’? What’s your immediate reaction? Does it momentarily cause you to reflect on your business and how things are going? Does it bring a particular issue to mind? What do you think of the person asking you the question? If you stop to think about how the question affected you then, perhaps, it might affect people of whom you ask that question in a similar way. I’d suggest that it opens the door to a possible conversation.
The next step ought to be that you listen. Amongst other things, I’ve done some training as a coach, counsellor and a mediator. One of the key things in the training is ‘active listening’. This is not just waiting for a gap so that you can express your views. It is not even listening to the content so that you may express your views on what they’ve said. It is also listening to what people are saying around the words, as well as what they’re saying, by not saying certain things. It’s deep listening. It’s listening with empathy, using your experience of life, of their sector of business, with imagination. You’re listening for the deeper things that might be driving how they’re feeling – where the stress or pain points are in what they’re talking about.
In this phase of the conversation you’re not seeking to express too much opinion. Instead you are seeking to explore. So, questions you ask should be open questions. What are those? Questions to which it is difficult to answer with a simple ‘yes’ or ‘no’. Typically, they are questions starting with ‘why’ and ‘how’. In a business context I personally would steer away form asking how they feel about that, as it might come across as a bit weird, but you would be listening out for the points of stress and pain.
Also, listen out for pauses. Resist the urge to fill them. The person with whom you’re speaking may have paused to think or deal with emotion before speaking. Don’t cut them off. Silence can also be a powerful tool to elicit more information. When in private practice as a litigator, I used this in negotiations – let the other side sweat after I’d made a proposal or asked a question. Often, they would feel the pressure to say something, which might cause a concession or some useful information. We feel awkward when the ball has passed to us in a conversation and there is silence. You might subtly be able to use that.
All of this might take some time and is normally best in a one to one situation. It works best, I would say, in a face to face environment, as we speak as much with body language as with our words. However, many of our conversations are now taking place by video call. Then there is the phone as well. I’m sure we have all managed to have a deep conversation by phone – so it can be done. We will have to adapt and learn how to use the medium.
So why am I going on about this? Well, I would suggest that these 2 words in the question open the door to the possibility of a conversation where you might be proactive about creating opportunities rather than reactive. I was in practice for 24 years, 14 of which as an equity partner of a mid-sized law firm. Since setting up HCL in 2014 I have worked with over 300 law firms. My perception is that most solicitors are reactive. They wait for clients to approach them with a request for assistance, effectively delivering a job to them on a plate. Yes, they may invest in advertising, which is a way of driving more requests for work to them. What most are not good at is working their own client base. Most law firms will have a gold mine of existing and past clients. These are the easiest people from whom to get work or recommendations from which to get more work. (I’ve written people on purpose, because, even in corporate and commercial work, it’s people with whom you have the relationships and who make the decisions.) Instead the firm will hunt for exciting new clients. These cost more to acquire.
As a side issue – does your firm track stats on how much it costs to acquire a new job? Not many do. It’s not something I commonly see as a report in case management systems. It would be very informative. In some practice areas, where the new work most often comes in by advertising, one might have a approximation of this. In most others it is seldom done. Take for example a new business client. Do you take into account the golf days, meetings, lunches, phone calls etc, salary and other overhead costs of the person courting of the client before they come onboard? I recently had quoted to me that a case management system provider has an average new client acquisition cost of £8,000. It makes you think. I would suggest that this should be factored into the profitability calculation of work by client, work type or practice area.
Place against this the cost of acquiring new work from an existing client. Normally much lower. At the very least firms should be sending out a regular newsletter to their client base reminding them that they exist and what they do. That can be done by email for little cost. It’s just nuts if one of your clients goes to another firm just because they couldn’t remember who they used last time they needed legal advice. What happens if your staff get into the habit of asking of their clients (where appropriate) ‘How’s Business?’? Most of their clients will work (you could change it to ‘How’s Work? In some circumstances.). It opens up the possibility that you might learn more from them. The bond you would with them will be deeper and they will trust you more for asking about them beyond the transaction with which you’re dealing. (Solicitors trade on trust.) Knowledge is Power? Well it’s certainly opportunity. You might learn of other aspects in their life with which your firm could assist – if not now, then potentially in the future (keep a note to touch base, with their permission).
Cross-referrals to colleagues. This is a subject for an article in itself, indeed a book. Again, my experience is that law firms, indeed professional services in general, are not good at doing this. I would suggest that your business will be much stronger and more profitable if you have a culture of cross referring, of working as a unit rather than lots of sole practitioners. Changing culture is another huge topic. However, visualise a firm where people are positively encouraged, perhaps even incentivised to actively look for cross referral opportunities in their client base, where the cost of acquisition is measured (work coming from an existing client will cost a fraction of the cost of acquiring a new client in most circumstances), where a regular relationship is maintained with your existing clients. Clients with whom you already have a deep relationship, handling several of their needs, are likely to be much more sticky and indeed willing to pay higher fees, as they perceive more than just price in the value that you deliver.
If this all sounds a bit daunting, you can start with small steps. We recently helped a long-standing client, a law firm which became a client in 2016. We write a monthly newsletter, so we remained in touch. They contacted us when they wanted to move offices earlier this year – a result of them reassessing their property needs in the light of the changing commercial rent environment in the Covid crisis. As well as assisting with changing their letterhead and suchlike, we helped them messaging all existing and past clients to tell them of their new address. When drafting the precedent email, I asked if I might include a paragraph listing the services they provided (which I took for their website). When I contacted my client firm 3 days after the mail merge had gone out, the owner told me that they had already taken 3 new instructions from existing clients as a result, totalling nearly £5,000 net fees!
So – How’s Business?
We have had quite a few aspiring solicitors asking for guidance on this subject - quite understandably. The SRA has published some helpful guidance on this subject. Below are some of the most pertinent points.
However, first of all here is a link to a really useful tool the SRA have put up. It is a decision tree as to whether to take the SQE or LPC route. It's in the form of a series of questions, the answer to which take you to advice.
Our transitional arrangements may already apply to you because you have started or completed a qualifying law degree, the Common Professional Examination / Graduate Diploma in Law or an exempting law degree. . But you can also choose to qualify on the current route or take the SQE, if you have started or completed the LPC, or if you have accepted an offer to start on the LPC, or paid a non-refundable deposit, before 1 September 2021.
Once you have the LPC, to qualify on the current route by 31 December 2032, you'll also need to:
If you have started, or accepted an offer to start, a period of recognised training (also known as a training contract) before 1 September 2021, then you can qualify as a solicitor through the current route.
To qualify this way, by 31 December 2032, you'll also need to:
If you are unable to complete a PRT, you can chose to qualify through the SQE.
It is possible that some non-law students may accept the offer of a PRT before 1 September 2021, and before they have been offered a place on a CPE/GDL.
In this case you may start a CPE/GDL programme up until 31 August 2022, and which meet our requirements for the CPE/GDL.
You will need to keep the evidence of your accepted offer in order to be accepted onto the CPE. For example, this could take the form of the exchange of correspondence between you and your training provider, accepting the offer of a PRT.
This is a route where you are asking the SRA to look at what you've done and agree that it is equivalent to what you need for an alternative way of qualifying. More info here: https://www.sra.org.uk/students/resources/equivalent-means-information-pack/
Learn here how we can help you get the experience that you have acquired Confirmed so that it counts towards your 2 year requirement under the SQE. https://hunningsconsultancy.co.uk/external-qwe-certification-service-2/
The UK has left the EU and the transition period is set to end on 31st December 2020. Up until then all UK organisations are bound by the General Data Protection Regulation (GDPR). So, what happens after 31st December 2020?
After the end of the transition period the GDPR will be brought into UK law under what’s known as the UK GDPR, which will be supplemented by the Data Protection Act 2018. This UK legislation closely mirrors the GDPR with some changes, especially around transfers of data between the UK and the EU/EAA. UK organisations that have an establishment in the EU or offer goods or services to, or monitor the behaviour of, EU individuals will continue to be bound by the EU GDPR, and may need to review their documentation.
Adequacy – In order to protect individuals’ personal data when it is transferred from the EU to a ‘third’ country i.e. a country outside of the EU, the European Commission looks at the protections offered by that country, in particular its data protection legislation as well as the way that government treats data privacy. If the Commission is satisfied that a third country offers sufficient protection it awards what is known as an adequacy decision. Once an adequacy decision is awarded, transfers can go ahead unhindered, as if they were being transferred within the EU. Once the transition period ends on 31st December 2020, the UK will become a third country, and how data can be transferred from the EU to the UK will depend upon whether the Commission awards an adequacy decision to the UK. This is by no means a forgone conclusion. Discussions are under way but the trade negotiations as well as EU concerns over UK government surveillance leaves a question mark over the likelihood of adequacy being achieved, especially in the short-term. In the absence of such a decision, organisations will need to find different lawful bases for dealing with their EU business, such as standard contract clauses, binding corporate rules etc.
The transfer of personal data from the UK to EU countries can continue as normal after 31st December 2020, because the UK has in effect given the EU an adequacy decision.
EU Representatives – organisations offering goods or services or monitoring the behaviour of individuals in the EU and that have no offices or branches in the EU will, after 31st December 2020, be required to appoint a representative in the EU. Organisations offering products or services to more than one EU country will not need to appoint a representative in each country but normally would to do so in the country where most activity takes place. Contact details for the representative must be included in the organisation’s privacy notice and a written agreement must be in place with the representative detailing the representative’s responsibilities. The representative will be the main point of contact for the local data protection authority/authorities as well as data subjects.
Under the UK GDPR it is intended that organisations outside of the UK that are bound by the UK GDPR will be required to appoint a representative in the UK.
Standard Contract Clauses – traditionally, organisations transferring personal data to countries outside the EEA and where no adequacy decision is in place, have been able to use approved standard contract clauses (SCCs) as a lawful basis for such transfers. The recent Schrems 2 ruling by the Court of Justice of the European Union (CJEU) agreed that SCCs are still valid, but that in order to rely on them organisations need to carry out (on a case by case basis) a risk assessment and consider implementing additional safeguards. SCCs place strict obligations on the parties and in some cases risk assessments may well throw up issues that give cause for concern. The CJEU also put pressure on data protection authorities (in our case the ICO) to be proactive in ensuring organisations comply. Particular difficulties may be encountered by organisations transferring to the USA because any risk assessment will reveal the very issues that led to the demise of the Privacy Shield.
There is a plan to introduce new, updated SCCs at some point but our advice in the meantime is to put SCCs in place, carry out the risk assessment and apply whatever safeguards you can, such as encryption, pseudonymisation.
Contact us if you have questions: [email protected] or 07887 524507
Here is a link to our DPO (Data Protection Officer) Service: https://hunningsconsultancy.co.uk/dpo-service-data-protection-officer/
Here we have gathered together information anda number of useful articles from the Law Society so that you may find them easily in one place.
The new national lockdown will come into force in England at 12.01am on Thursday 5 November and last until at least Wednesday 2 December.
In Wales, the restrictions brought in through the national ‘firebreak’ lockdown will continue until 9 November.
But remember - you can Carry on Trading!!
The most relevant points for solicitors include:
https://www.lawsociety.org.uk/topics/coronavirus/coronavirus-covid-19-information-for-legal-services
https://www.lawsociety.org.uk/topics/coronavirus/guidance-to-law-firms-on-the-job-support-scheme
https://communities.lawsociety.org.uk/september-2020/ups-and-downs/6001304.article
The Law Society Gazette reports today that the Legal Services Board has approved the SQE - due to start in the autumn of next year.
Uncertainty has been removed. Qualifying as a solicitor will be by this method from the autumn on 2021. Here's a link to the article in the LS Gazette announcing this: https://www.lawgazette.co.uk/news/its-official-lsb-approves-solicitor-super-exam/5106169.article?
For information about the SQE see here: https://hunningsconsultancy.co.uk/the-new-sqe-exam-and-qualification-method/
For information on how you can use the Apprenticeship Scheme to pay for the SQE training costs see here: https://hunningsconsultancy.co.uk/apprenticeships-the-sqe-how-this-can-save-you-money/
For information on how we can help aspiring solicitors with monitoring your QWE see here: https://hunningsconsultancy.co.uk/external-qwe-certification-service-2/
