Tracey Calvert and Paul Bennett consider the obligations of firms with regard to the conduct and behaviour of their support staff
It is rare for solicitors to work in an environment where they do not have support staff to assist them. This assistance can take many forms from secretarial and administrative assistance to paralegal support, as well as services such as human resources, learning and development, IT, marketing and a number of internal accounting and other financial services that are all delivered by support staff. Where the environment is an authorised law firm, it is essential that compliance and risk management strategies extend to all such support staff in respect of the services that they perform.
This is rooted in the fact that the business itself is authorised by the Solicitors Regulation Authority (SRA). This authorisation contains conditions which must be satisfied to avoid the risk of regulatory scrutiny and censure, with the worst-case outcome being the withdrawal of authorisation and the consequential closure of the firm if it is deemed to be too unsafe to be allowed to provide legal services. In other words, the firm’s authorised status is precarious and only as safe as the firm’s weakest link. Where that weak link is a member of support staff, the SRA will want to consider what did or did not happen in terms of effective management.
Working in an authorised environment
Support staff might fail to understand the significance of working in an authorised business, both in respect of personal consequences for them and also in terms of how their conduct has consequences for the business. The SRA has regulatory reach over all law firm employees, regardless of what tasks they perform. These regulatory powers are commonly used in respect of support staff who fail to demonstrate the same professional qualities as qualified staff, and while there is no equivalent to the roll of solicitors from which they can be removed, they can be barred from working in the profession by the SRA’s use of a section 43 Order (as included in the Solicitors Act 1974).
Support staff need to understand that any poor behaviour is not just an employment matter but will also be a regulatory concern. The following are all examples of recent regulatory action taken against support staff which resulted in the use of such orders and the banning of support staff from being employed in SRA-authorised law firms:
- A technical engineer was banned because he had stolen mobile phones and laptops worth £23,000 from his employer
- A claims handler was banned because she had falsified client signatures on witness statements to be used in court
- An IT service desk analyst was banned for sending offensive messages to a work colleague via the firm’s intranet
- A conveyancing completions manager was banned for misleading someone by posing as a divorce expert, and
- A secretary was banned for stealing a client’s collection of service medals.
It would be naive to assume that support staff will automatically have the necessary knowledge of regulation, and the regulatory interest in them, when they secure employment in an authorised law firm. It would also be naive to assume that the SRA would not look to law firm managers to fill knowledge gaps. After all, the SRA Code of Conduct for Firms clearly states at paragraph 4.3 that the law firm must ensure that, “managers and employees are competent to carry out their role, and keep their professional knowledge and skills, as well as understanding of their legal, ethical and regulatory obligations up to date”. This is in addition to the need to demonstrate effective compliance and business systems in Chapter 2 of the Code and to demonstrate risk management, monitoring and mitigation in the workplace (paragraph 2.5).
Understanding compliance responsibilities
A sensible compliance response should consider the risks of employing support staff who misunderstand their responsibilities, or who otherwise pose a threat to the firm’s continuing authorisation. While solutions are not prescribed by the SRA, and are largely dictated by such factors as the type of firm, the way in which services are delivered, the experience of staff and so on, the following actions might all be considered an appropriate response:
- thorough pre-employment screening of all staff and ongoing monitoring
- an induction programme to ensure that staff understand their legal, ethical and regulatory obligations
- meetings with the firm’s compliance officers and any compliance team so that there is a familiarity with key compliance role-holders and awareness of sources of help
- training on the firm’s internal policies, controls and procedures
- regular update training on regulatory and legal compliance topics
- effective supervisory oversight of all roles
- compliance and professional behaviours being assessed as part of supervision and performance review work, and
- the development of a compliance culture within the business which promotes openness, accountability and transparency.
Case study – pre-employment checks
ABC LLP, a two-partner law firm, needed a private client fee-earner to cover maternity so took on a locum legal executive after taking references from her previous firm, checking her qualifications and recording evidence of a right to work in the UK.
There was a possibility in a growing department of a permanent role. The arrangement was for three days per week, and it was known that on the other two days the locum had work elsewhere.
The locum was well liked by colleagues and clients and after six months or so the available permanent role was discussed as an alternative to continuing as a locum due to the growth of the firm. However, the firm wanted the locum to commit to five days per week as the solicitor returning from maternity wanted to return part-time. The locum asked for time to think over the offer.
The pre-employment checks undertaken included:
- references from two previous firms (both positive)
- identification documents of a right to work in the UK
- a Google search of the individual name (with and without the words ‘solicitor’ and ‘legal executive’), and
- the Chartered Institute of Legal Executives register was checked and the disciplinary record clear.
The firm did not check the SRA’s own published decisions as the person was a non-solicitor but under section 43 of the Solicitors Act 1974 the SRA has the power to exclude any non-admitted person from working in every law firm in England and Wales.
Seven months after the arrangement commenced, a report in a local paper came to light regarding theft from a client’s estate while the locum worked elsewhere. The news report was spotted by one of the partners by chance while waiting at the dentist. The report outlined that the locum was banned by the SRA from working for any law firm in England and Wales following theft from a client’s estate. The locum continued to work over the subsequent 10 days despite the ban and failed to alert the firm to the disciplinary action and outcome.
The learning outcome here is that you must carry out periodic checks on all personnel. The checks undertaken pre-employment would not have identified the SRA’s section 43 order, but periodic checks would have picked up if the media report was missed.
Case study – abuse of trust
Miss X was a junior member of staff whose performance and training over a number of years lead to promotion to a position of access and trust with the firm. Miss X undertook two levels of apprenticeship over a four-year period with ABC LLP and was outstanding at her duties.
As a result of her high-quality work Miss X was entrusted with helping the managing partner with some duties and had privileged access to a strongroom and safe. Miss X, after almost five years as a model employee, was found selling items stolen from the firm’s safe on Facebook. A client noticed the rare item on Facebook and alerted the firm who were stunned to discover the item missing from their safe.
When asked by the firm to explain the Facebook ads, Miss X admitted to theft and was dismissed as an employee. Afterwards more thefts came to light over the months prior to termination of her employment.
The police investigated and prosecuted Miss X who was given a suspended prison sentence.
The SRA issued a section 43 order to prevent any firm from employing Miss X in any capacity.
The lesson here is even though there may be trust in an employee they must be subject to continuing checks and balances in terms of systems and policies.