Welcome to the Regulation & Compliance Office’s fortnightly roundup, where we look at all the latest stories to keep you ahead and informed in the world of law and compliance.
The RACO roundup is just another way in which we keep the solicitors and other law professionals we work with in the know, so we can ascertain you are never missing the vital developments occurring in your profession.
Below, you will find the most recent headlines selected by our compliance experts, followed by a Security Section, where we will also give you an overview of the latest scams currently impacting solicitors and their clients.
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Historical AML Breaches End in Significant £300,000 Fine for US Firm
With an office in London’s Square Mile, a US-based international firm has been fined £300,000 for significant breaches of anti-money laundering regulations.
The firm was due to face a three-day hearing at the Solicitors Disciplinary Tribunal on March 12. However, on the first day of the hearing, an application was made for the three-person panel to approve an agreed outcome.
The US-based firm was reported to have failed to comply with the Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. They also allegedly failed to carry out a firm-wide risk assessment between 2017 and 2020, as well as failing to have in place adequate policies, controls or procedures between 2017 and 2023.
Accusations were also made that, between 2017 and 2022, the firm failed to have in place compliant client and/or matter risk assessments in connection to four respective files.
Last Friday, the firm and the SRA agreed on the penalty. The tribunal said that the agreed outcome was outside the 28-day deadline and commented that it was “unhelpful and disappointing”.
After retiring, the chair stated: “We have considered the agreed outcome document that has been presented jointly by the parties. We have decided we will accept the agreed outcome. We agree the sanction is proportionate [and] takes into consideration the different aspects, the seriousness of the misconduct and the fiscal size of financial resources. The misconduct admitted and found proved is categorised in the more serious category.”
He also added that the firm was “well resourced […] with a global reputation”, making the fine “appropriate”, and that the level of the fine “need[ed] to be meaningful to be a deterrent in a wider context”.
There was “no evidence [of] any actual harm being caused by any of the failings accepted,” the tribunal concluded, and the risk of harm resulting from the breaches was minimal. It was furthermore ascertained that the misconduct “did continue over a period of time.”
As per the agreed outcome, the tribunal ordered that the firm be fined £300,000, with an additional charge of £62,000 in costs.
Source: here.
Compliance For Law Firms
At RACO, our Regulation and Compliance Service, including Risk Management and AML Risk, provides a cost-effective but essential solution for law firms to ensure they achieve a compliant environment.
Our approach to compliance is to bring to firms bespoke and compliant policies and procedures that are proportionate and sensitive to the way in which a firm operates. For a compliance strategy to be successful, it has to be adopted by all in the firm. We work to remove the ‘red tape’ wherever possible and ensure, whilst the firm is compliant, that there is full adoption of the policies and procedures.
We work with firms of all types, from sole practitioners to partnerships, limited companies, and ABSs. We recognise that it is essential to understand how a firm implements compliance to tailor the solution to each firm’s working practices. This is why our services are always bespoke to each firm we work for.
Discover more here.
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“Not a Done Deal,” says SRA In Response to Removal of the Client Account
Responding to inquiries relating to the removal of the client account, a senior executive at the Solicitors Regulation Authority has assured solicitors that no decision has yet been made.
One of the core aspects of the recently closed consultation on consumer protection was the option of finding a third party to hold monies. Asking whether there were appropriate alternatives which may be better at safeguarding clients’ money, the SRA debated whether it was necessary for firms to run client accounts at all.
Aileen Armstrong, the SRA’s executive director of strategy, innovation and external affairs, stated while speaking at the Law Society’s risk and compliance conference that it was important to explore options. “It is not a fait accompli but it is important to engage and think about these options,” said Armstrong. “I don’t think there is a question of this happening today or this year. [But] there is the potential.”
“The most useful alternative might not exist yet,” she added, whilst also positing that an intermediary account such as that used by the Bank of England could be an option. Armstrong also revealed that over 300 responses had come into the consumer protection consultation, remarking that this had met the goal of sparking a conversation.
“We were very much wanting to stimulate debate and generate intelligence to inform the way forward and we certainly got lots of food for thought,” she said.
In a separate session, regulation specialist Jayne Willetts stated the SRA (by proposing that a third-party managed account could replace the solicitor’s client account) was “naïve” and “simplistic” in its approach.
“This is a step too far, and the SRA seem to have prepared the ground rather before they launched the consultation,” she expressed. “They are saying we are not to be trusted with the client account when we have been doing it for years. How on earth are we going to deal with transactional work if we can’t deal with client money?”
The Law Society’s recently published Financial Benchmarking Survey showed that interest on the client account was a considerable contributor to law firm profits last year.
Source: here.
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Surviving Inflation: Why Specialised Legal Bookkeeping is More Important Than Ever
If you’ve ever found yourself staring at a sea of invoices, wondering why on earth you chose a career that involves this much paperwork, you’re not alone. Legal bookkeeping is a different beast altogether—one that demands precision, compliance, and an uncanny ability to decipher the most cryptic of client transactions. It’s not just about balancing the books; it’s about keeping your firm audit-ready and ensuring every penny is accounted for.
A Wake-Up Call from the Economy: Inflation’s Unexpected Rise
In recent news, British inflation has unexpectedly risen to a 10-month high of 3.0% in January, driven by increased costs in transportation, food, and private school fees. Yes, even your morning coffee now costs the equivalent of a small legal consultation.
This surge in inflation serves as a stark reminder of the importance of meticulous financial management. Just as unchecked economic factors can erode purchasing power, lax bookkeeping practices can turn your firm’s finances into a horror story faster than you can say “SRA audit.”
In times of economic uncertainty, law firms cannot afford to take a haphazard approach to financial management. With costs rising unpredictably, maintaining accurate financial records isn’t just an admin task—it’s a survival strategy. This is where specialised legal bookkeeping swoops in like a caped hero.
Why Legal Bookkeeping is a Whole Different Ball Game
Unlike standard bookkeeping, legal bookkeeping comes with its own set of rules, regulations, and enough compliance requirements to make your head spin. Solicitors’ Accounts Rules (SARs), VAT regulations, client money handling—these aren’t just optional extras; they’re the financial equivalent of oxygen. Get it wrong, and you’re looking at more than just a slap on the wrist from the SRA or worse, an unexpected visit from auditors who love a surprise.
Common Pitfalls of DIY Legal Bookkeeping
Many law firms start off handling bookkeeping in-house, thinking, “How hard can it be?” Fast forward a few months, and you’re knee-deep in reconciliation issues, missing funds, and a headache that no amount of coffee can fix. Here are just a few of the classic DIY mistakes:
- Mixing Client and Office Money – A big no-no. Client money should be held separately from office funds at all times, or you could find yourself in regulatory hot water faster than you can say “compliance breach.”
- Forgetting to Record Transactions Promptly – Leave it too long, and you’ll be playing a very stressful game of financial hide-and-seek.
- Misallocating VAT – The taxman has a long memory and a keen eye for detail. Incorrect VAT handling can lead to costly penalties and a few awkward conversations with HMRC and no one wants that phone call.
The Benefits of a Specialised Legal Bookkeeper
So, what’s the alternative? Hiring a specialist legal bookkeeper is like bringing in an expert chess player to help navigate a financial minefield—they know the moves before you even realise there’s a problem.
- Regulatory Compliance Without the Stress – A specialist keeps up with ever-changing regulations, so you don’t have to.
- Time-Saving Magic – With someone else handling the books, you can focus on what you do best: practising law, not battling spreadsheets.
- Fewer Errors, More Accuracy – Precision matters. A legal bookkeeper ensures that every transaction is accounted for correctly, reducing the risk of costly mistakes (and sleepless nights).
A Firm Foundation in Unstable Economic Times
With inflation on the rise and economic stability about as predictable as British weather, law firms need to be more financially resilient than ever. Just as businesses are now scrutinising their expenses, law firms must ensure that their financial management is bulletproof.
Specialised legal bookkeeping does more than just keep you compliant—it provides the financial clarity needed to make informed business decisions. When cash flow is monitored correctly, expenses are tracked, and compliance is airtight, law firms can weather economic storms far more effectively.
Conclusion: The Smarter Way to Handle Legal Finances
At the end of the day, legal bookkeeping isn’t something you want to take chances with. Whether you’re a solo practitioner or part of a larger firm, having an expert manage your books means you can sleep a little easier, knowing everything is in order. And let’s be honest—wouldn’t you rather spend your time winning cases than wrestling with reconciliations?
If your firm’s financial records are giving you sleepless nights, maybe it’s time to call in the experts. After all, even the best lawyers need a little help keeping their numbers in check!
Contact Legal Keepers
Talk to Legal Keepers today to find out more about how they can assist your firm.
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SCAM ALERTS
Website ‘jonhboyl-solicitors.com’ is misusing the name of John Boyle Solicitors Limited
The SRA has shared that a website at ‘www.jonhboyl-solicitors.com’ is operating and misusing the name of a genuine firm of solicitors.
The SRA understands that the website misuses the genuine firm’s name, company number and address.
The suspicious email address provided is ‘info@jonhboyl-solicitors.com’.
Please note that any business or transaction through the website ‘www.jonhboyl-solicitors.com’ or email address ‘info@jonhboyl-solicitors.com’ is not undertaken by a firm or individual authorised and regulated by the SRA.
The SRA does, however, authorise and regulate a genuine firm of solicitors called John Boyle Solicitors Limited. The address is 36 Fore Street, Redruth, TR15 2AE.
The firm’s genuine website is www.jb-solicitors.com. They also operate the website www.johnboylesolicitors.com. Emails from the firm use the domains ‘@johnboylesolicitors.com’ and ‘@jb-solicitors.com’.
The genuine firm of John Boyle Solicitors Limited has confirmed it does not have any connection to the website referred to in the above.
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‘Foundex LTD’ website falsely claiming to be a law firm
The SRA has shared that a website at ‘www.foundexltd.com’ is operational and falsely claiming to be a law firm called ‘Foundex LTD’. The website also falsely displays the SRA digital badge.
The website provides telephone numbers of ‘+44 745 814 8835’ and ‘+32 480 20 5602’. It also gives the email address ‘info@foundexltd.com’ and a psychical address of ‘Boulevard Saint-Lazare, Sint-Lazaruslaan, Brussels, Belgium, 1210’.
Please note that the SRA does not authorise or regulate a firm of solicitors called ‘Foundex LTD’.
Any business or transaction through the website of ‘www.foundexltd.com’, the telephone numbers of ‘+44 745 814 8835’ and ‘+32 480 20 5602’, the email address of ‘info@foundexltd.com’ or the address of ‘Boulevard Saint-Lazare, Sint-Lazaruslaan, Brussels, Belgium, 1210’ is not undertaken by an individual or firm of solicitors authorised and regulated by the SRA.
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‘North London Solicitors’ Website
The SRA have shared that a website (www.northlondonsolicitors.com) is operating and claiming to be a law firm by the name of ‘Noth London Solicitors’.
The website provides a postal address of ‘Tower 42, 25 Old Broad Street, London EC2N 1HN’, a telephone number of ‘+44 20 3289 4225’ and email addresses of ‘info@northlondonsolicitors.com’ and ‘clerk@northlondonsolicitors.com’.
Members of the public have been contacted by an individual called ‘Frank Imes,Esq’, using an email address of ‘Frankimes.esq@hotmail.com’ and claiming to be a ‘Snr. Atty’ at ‘North London Solicitors’ in relation to a supposed inheritance of an unknown individual with a supposed same surname of the recipient.
The email also provided another telephone number of ‘+447389670170’.
Please note that the SRA does not authorise or regulate a firm called ‘Noth London Solicitors’ or a solicitor called ‘Frank Imes’.
Any business or transactions through the website or the contact details set out above are not undertaken by a solicitor’s firm authorised and regulated by the SRA.
BEEN CONTACTED?
Here’s What to Do…
When a firm’s or individual’s identity has been copied or cloned, due diligence is necessary. If you receive correspondence you believe to be suspicious, you should conduct your own due diligence by checking the authenticity of the correspondence by contacting the law firm directly by reliable and established means.
You can also contact the SRA directly to find out if individuals or firms are regulated and authorised by the SRA and verify an individual’s or firm’s practising details. Other verification methods, such as checking public records (e.g. telephone directories and company records), maybe required in other circumstances.
Reach Out to RACO
We at RACO are always at hand to provide tailored guidance to help you make the most informed and beneficial decisions. We help you understand the recurrent regulatory shifts and work with you to provide solutions. With our team of professional specialists and our renowned legal expertise, we can work with your firm to always ensure you are never left unprepared in the wake of legal changes or cyber threats.
For more information on how we can help, call our consultants on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk
