What Has Happened Since Our Last Article
When we published our practical guidance on the COLP and COFA changes in early September, the Legal Services Board (LSB) had just approved the new COLP and COFA changes and the SRA was preparing for phased implementation from January 2027. More recently, opposition from smaller practices has intensified significantly.
A newly formed SME & Boutique Law Firm Alliance, founded by Jade Gani of Circe Law, has brought firms and professionals together to challenge the practical impact of the separation rules. The alliance has written an open letter to the SRA requesting, among other things, that the January 2027 implementation be postponed, that the £600,000 turnover threshold be reconsidered and replaced with an evidence-based risk assessment, and that the SRA publish the evidence behind the restrictions. Gani has argued publicly that a turnover of £600,000 does not make a law firm large or organisationally complex, and that many successful specialist practices with only a handful of people will exceed that figure.
The alliance’s letter warns that firms face recruitment and outsourcing costs they may struggle to absorb, and that hundreds could be competing simultaneously for a limited pool of experienced COLPs and COFAs. A separate letter to the outgoing and incoming presidents of the Law Society, Mark Evans and Brett Dixon, calls on the membership body to raise the COLP and COFA issue as an agenda item at its upcoming AGM on 14 October 2026. The alliance has indicated it will seek the necessary support for a special AGM if it is not included.
In response, an SRA spokesperson said:
“We all agree on the need to better protect the public by strengthening the safeguards around client money. Understandably, given the complexities involved, there is real debate about the best way to do this.
“We are grateful to those that have signed the letter outlining their concerns. We are committed to continuing the conversation on this important issue and we will take the time to carefully consider the points raised with us before we respond.”
Source: The Law Society Gazette ‘Small firms call for no confidence motion on SRA board’
The Split May Face Scrutiny, But the Client Account Rules Will Not
The opposition to the COLP and COFA separation is real and growing, and we will continue to monitor it as the SRA responds. It is possible that the thresholds will be revisited or the implementation timetable adjusted, particularly if the Law Society AGM produces a formal resolution. What we do not expect to change is the SRA’s wider programme of strengthening client account protections; read our previous guide here: SRA Set to Strengthen Client Money Safeguards – Proposed Changes to Accountants’ Reports Explained. The COLP and COFA split is one component of a broader package that includes tightened rules around client money, governance, and financial controls. Even if the separation rules are softened or delayed, the direction of travel on client account oversight is settled. The SRA has been building towards it for several years, and the LSB has approved the underlying rationale.
That distinction matters for how firms respond. The COLP and COFA split may well be softened or pushed back. The broader tightening of client account oversight will not be. A firm that reads the current noise as a reason to pause all preparation is assuming both will stall together, and there is nothing in the SRA’s track record to support that.
What Firms Should Do Now
Our guidance from the earlier article remains the right approach. Whether the implementation date holds or shifts, the practical steps we set out (assessing whether anyone in the firm genuinely holds unilateral decision-making power, reviewing how managing partner roles interact with COLP and COFA designations, documenting how decisions are made, and considering a Partnership Board or Board of Directors where needed) are sensible governance improvements regardless of the regulatory timeline. A firm that completes them is better governed. A firm that waits is no worse off only if the rules never arrive, and there is no credible scenario in which these rules disappear entirely.
For firms above the thresholds that have already concluded a change of COLP or COFA is needed, the FA2 application process takes up to three months, which means any application submitted after October is unlikely to be approved before January. Firms in that position should not delay further, whatever the outcome of the pushback.
For firms below the thresholds, none of this applies to you. The rules do not change your position, and the opposition does not change it either. But it is still worth reading the governance points above, because the SRA’s underlying expectation that compliance roles carry genuine independence applies to every firm, not only those caught by the thresholds.
RACO Will Continue to Monitor Developments
At RACO, our compliance teams are watching this closely. If the SRA adjusts the thresholds, delays the implementation, or publishes further guidance (which it has said it will do this autumn), we will update our advice accordingly.
In the meantime, firms should prepare on the basis of the rules as they currently stand. A delay, if it comes, gives you more time. It does not remove the obligation.
How RACO Can Help
If your firm needs to change its COLP or COFA, or if you are unsure whether the new rules apply to your current arrangements, we can help. RACO presents multiple COLP and COFA applications on behalf of firms and can guide you through the process from start to finish, including advising on the best way to get the candidate approved, completing the FA2 form, and engaging with the SRA throughout the approval process.
For firms reviewing their governance structures more broadly, our Detailed Risk Management and Compliance Review covers decision-making arrangements alongside the wider compliance framework, and our SRA Compliance Essentials service provides ongoing support to keep your firm aligned with regulatory expectations as they develop.
COLP and COFA Training: Our COLP Masterclass and COFA Masterclass courses cover the duties and responsibilities of each role, including the practical implications of the new rules. Whether you are new to the role or an existing compliance officer, these courses will help you understand what the SRA expects.
Speak to Our Compliance Team
To discuss how the COLP and COFA changes affect your firm, review your governance arrangements, or start an application, call us on 0203 985 8550, complete the online enquiry form, or email us at info@regulationandcomplianceoffice.co.uk
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