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 that 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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Crackdown on Misleading ‘No Win, No Fee’ Marketing
The Solicitors Regulation Authority have made public plans for a proposed “clampdown” on the claims sector, with aims to bring about the cancellation of the term ‘no win, no fee’. The regulator will soon issue a warning to firms about the use of the phrase.
“We are concerned the ‘no win, no fee’ label doesn’t give consumers an accurate view of what could be involved when pursuing a claim,” the SRA said in a recent consultation. “In particular, the risks to the consumer and potential costs they might incur if a firm doesn’t manage a claim appropriately or a claim is unsuccessful.”
In recent years, the term has become synonymous with high-volume claims and has come under scrutiny as clients of certain firms were ordered to pay five-figure defence costs.
The SRA commented that the situation called for “robust action” to deal with a sector concentrated in areas including housing disrepair, data breaches, flight delays, diesel car emissions, motor finance commission and other financial services.
There are likely to be more duties imposed on firms running these claims around marketing, advertising and around the onboarding of clients. Consumers should be told the likelihood of success of their claim, for example, how much they might receive if they win and how the firm or any third party will get from a successful claim.
The SRA also remarked on its biggest concern: firms taking a ‘one size fits all’ approach to new clients and using a standardised and uniform sign-up process without ever considering their needs.
“We are alert to the potential risks of a ‘tick box’ approach that doesn’t encourage a firm to consider a client’s individual needs and circumstances,’ said the regulator. The SRA is already investigating 76 law firms involved in such claims, and has recently written to more than 500 other firms asking them to complete a mandatory declaration of compliance.
Chair of the SRA board, Anna Bradley, said the risks and issues being found in the high-volume claims market are ‘unprecedented’. She added, ‘Too many firms don’t have their house in order, so we need to use all the levers at our disposal to protect consumers and identify poor practice.’
Source: here.
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Performance Management as Strategy – Aligning Compliance with Performance Excellence
Aligning Supervision and Performance for Law Firm Success
A firm’s Supervision Strategy is key to meeting regulatory requirements under the Solicitors Regulation Authority (SRA) Code of Conduct (paragraph 3.5) and specifically provides that where a person within the firm supervises or manages others providing legal services, those supervisors remain accountable for the work carried out through them and they effectively supervise work being done for clients.
The code also requires that a supervisor is responsible for ensuring that those they manage are competent to carry out their role and maintain their professional knowledge, skills, and their understanding of their legal, ethical, and regulatory obligations up to date (paragraph 3.6).
Read the full guidance here: https://www.sra.org.uk/solicitors/guidance/effective-supervision-guidance/
However, what if compliant supervision policies could be more than just another regulatory duty?
Connecting Compliance and Performance for Firm-Wide Impact
At the Regulation and Compliance Office (RACO), we see how supervision and performance management can be aligned. When implemented effectively, this becomes a strategic advantage that transforms how a firm operates, retains talent, maintains compliance, and boosts profitability.
Why? Because we believe that supervision isn’t just about catching mistakes, it’s about enabling success. By connecting supervision and performance, the firm can foster a positive working environment and achieve its overall goals and targets.
Importance of Performance Management
While most firms will typically establish their own set of targets and objectives for staff, many still lack effective performance management programmes that address both the overall needs of the business and the employees. This often leads to sporadic review meetings, negative perceptions about the role of supervisors, vague objectives, and a reactive approach that often focuses too heavily on criticism rather than recognising good performance. Consequently, this can demotivate and disengage staff, lead to errors going unnoticed, cause apprehension when reporting concerns, result in underperformance, and lead to high performers leaving.
A connective supervision and performance management programme that is strategic, delivers tangible results:
- Staff retention improves, which reduces turnover and saves on recruitment and onboarding costs.
- Productivity increases as clear goals and effective communication enhance the efficiency and output of the fee earner.
- Client satisfaction and communication improve, leading to fewer errors and delays that enhance service delivery.
- Profit margins improve when engaged and efficient teams deliver more value while maintaining lower overhead costs.
RACO’s Approach – Enhanced Performance and Compliance Through Clarity
At RACO, we have developed a Performance Management Programme Service, specifically for law firms, that is designed to deliver:
- A performance management policy
- A presentation for delivery to the staff.
- Draft objectives for completion for each member of staff.
- Draft job profiles for each role.
- A review form for the staff to complete.
- A review form for the supervisor to complete.
- A financial target objectives calculator.
- A Change request form for staff to use to address issues such as pay, benefits, working hours changes and flexibility, etc.
- Performance Development Process (PDP) and forms.
- Agreed data suite to enable the firm to produce information for staff to track their own performance.
The focus of the final policy will be to ensure a proportionate and workable performance management programme that is respected by staff and enables supervisors to manage those they are responsible for effectively. The programme will introduce a cohesive approach to task management, to the overall benefit of the firm.
The outcome should result in a firm which has managers who engage with staff, staff who feel enriched with knowledge, and a clear understanding of expectations. A positive experience will then assist with critical areas such as profitability and staff retention.
Whether you are seeking to upgrade an existing programme or if you are implementing processes for the first time, we will work to deliver a solution that fits the firm.
Enhanced Services
In addition to the standard service, the firm can also request RACO to perform the following tasks:
- Setting of Financial Targets – Working with the firm to set out and agree on financial targets for each role, ready to be included in objectives.
- Drafting of staff objectives and job profiles – Final objectives completion, extending the templates to make sure they are bespoke drafted for each role and ready for detail to be included for deployment and signature.
- Review of Administration and Support Roles – An analysis of each of the administration and support roles to ensure that every person who occupies one of these positions is understood and reflected in the objectives and job profiles. Often, with administration and support roles, tasks develop over time, and this process enables the firm to understand each task performed by such staff and to reflect it in their own objectives. This process involves asking staff to complete a task table and deciding whether the task should remain with them. If so, it should be reflected in the job’s profile and objectives.
- Training for all Staff – Delivery of a training presentation setting out how the performance management review process will operate and what they can expect. Also, to ensure that they understand what they are expected to do and how their supervisor will engage with them.
- Training for all Supervisors – A training course to assist supervisors in the overall approach to management and supervision and setting out the way they must act when approaching informal and formal reviews, addressing issues and providing praise.
Find out more about the Performance Management Programme Service, or download the brochure here: Brochure: Performance Management Programme.
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The Hidden Costs and Risks of In-House Client Due Diligence
The last six months have seen increasing regulatory action from the Solicitors Regulation Authority (SRA), which has been actively issuing fines, particularly for breaches of anti-money laundering (AML) regulations. Backed by recent changes granted to them by the Economic Crime and Corporate Transparency Act 2023, the regulator now has the power to impose unlimited fines for rule breaches related to economic crime, and this has been transforming the financial consequences of regulatory breaches.
Failings in AML policies, controls and procedures are still dominating the reasons for firms facing financial penalties from the SRA. Some of these most recent reasons fines are being imposed include failures to conduct proper client and matter risk assessments, maintain compliant policies, or apply correct Enhanced Due Diligence (EDD) and source of funds checks. However, many firms are still relying on fee earners and support staff to manually complete Client Due Diligence (CDD) and Client or Matter Risk Assessments, often without the necessary training, time, or correct policies, controls and procedures (PCPs) in place.
Due to the growing scrutiny from the SRA, it is essential for firms to appreciate the importance of their Due Diligence and Matter Risk Assessment procedures. These processes are not just best practice; they are legal obligations that form the backbone of a firm’s AML framework. Unfortunately, it is often these procedures that many firms struggle to get right, or staff do not fully understand how to complete an assessment correctly, what to look out for, and when, for example, to apply Enhanced Due Diligence.
Why Are In-House Risk Assessments Failing Firms?
For most firms, the reality is that in-house CDD or risk assessment processes are frequently fragmented. Fee earners are expected to complete the necessary client due diligence checks, collect and verify documentation, understand when to apply Enhanced Due Diligence (EDD), and assess client and matter risk. This, all while managing their day-to-day tasks or caseloads. Although many firms assume that utilising in-house staff is more cost effective, this approach not only introduces risk, but also takes up valuable time that could be dedicated to client care or billable work.
At the Regulation and Compliance Office (RACO), our compliance officers have seen firsthand how firms struggle to maintain consistent compliance procedures across their AML obligations. We often see cases where EDD triggers are missed, source of funds checks are applied incorrectly, findings are inadequately documented, and various other regulatory obligations and training gaps that expose firms, their staff, and clients to risk and regulatory scrutiny. These oversights are precisely what the SRA has been targeting.
Fully Outsourced Support for Due Diligence & Risk Assessment Service
Because of this, we have designed a service that provides law firms with a seamless, fully outsourced solution for Client Due Diligence (CDD) and Risk Assessments.
Our Due Diligence and Risk Assessment Service has been designed to enable law firms to focus on the provision of their legal services while we collate the necessary documentation for Due Diligence, Enhanced Due Diligence (where needed), and completion of the Client and Matter Risk Assessment, which must be completed on all matters in scope of the Money Laundering Regulations 2017.
Why Choose Our Service?
Firms that have outsourced their CDD and Risk Assessments to RACO are benefiting from:
- Comprehensive Due Diligence – We collect, verify, and assess all necessary documents, including KYC and AML checks.
- Risk Assessment Support – We prepare the Client and Matter Risk Assessment for fee earners to review and approve.
- Seamless Integration – We work with your firm’s existing AML processes, ensuring compliance without disruption.
- Cost-Neutral Approach – Our service fees can be passed on to clients as part of your legal fees.
What’s Included?
- Collection of KYC documents (Photographic ID & Proof of Address)
- Access to your Electronic AML Provider for requesting AML checks
- Companies House checks for Ultimate Beneficial Owners (UBOs)
- Ongoing monitoring & Enhanced Due Diligence (EDD) where needed
- Client risk assessments & detailed reports for fee earners
How Does it Compare?
| Feature | In-House CDD & Risk Assessment | Outsourced via RACO Service |
| Time Efficiency | Fee earners manually collect and verify data. | RACO handles collation, verification, and reporting, freeing up fee earner and admin time. Most firms report a time saving of an hour per case, freeing up resources to focus on other areas. |
| Compliance Accuracy | Varies by team knowledge and workload, limited by experience and understanding of regulations. | Focussed expertise that understands the regulations and applies them in a consistent and compliant way. |
| Access to AML Checks | Requires internal access and training and understanding of obligations. | RACO uses your AML provider to perform checks, carried out by compliance experts. |
| Source of Funds Checks | Often inconsistently applied. | Systematic collection and reporting included. |
| EDD Identification | May be missed or delayed | Proactively flagged and escalated. |
| Reporting & Documentation | Fee earners prepare and review manually. | RACO submits completed risk assessments for review. |
| Cost Management | Internal costs and overhead. | Transparent pricing, passed to client, cost neutral. |
| Client & Matter Risk Assessment | Usually inconsistent or incomplete. | Tailored, documented and regulator aligned. |
| Scalability | Limited by staff availability and training. | Easily scalable across multiple matters. |
For full details on our service, including requirements and processes, download our brochure:
Due Diligence & Risk Assessment Brochure.
Useful Resources
The Law Society: Guidance on Customer Due Diligence.
Detailed Risk Management and Compliance Review.
Read some of our previous articles for related information:
The SRA’s AML BLITZ Continues with Another £64,000 Fine.
A Warning To Conveyancing Firms.
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S C A M A L E R T S
Document misusing the name of Duncan Lewis Solicitors and Olivia Amy Rose
Members of the public have received a document purporting to be from a genuine solicitor. The SRA understand that the document is in relation to the supposed recovery of capital invested in fraudulent platforms that operated under the guise of investment opportunities in international financial markets.
The document was in Portuguese. It misuses the name and logo of a genuine firm of solicitors and purports to be signed by a genuine solicitor. It also gives the address of the Willesden County Court in London.
The SRA has been informed that the members of the public were provided with a contact name of ‘Petter Mallouk’ and an email address of ‘Peter.mallouk@bonmotivinvest.top’ and a telephone number of ‘+372 5610 8647’.
Please note that the SRA does not authorise or regulate a solicitor called ‘Petter Mallouk’.
Any business or transaction through ‘Petter Mallouk’ or the email address ‘Peter.mallouk@bonmotivinvest.top’ and telephone number ‘+372 5610 8647’ are not undertaken by a firm or solicitor authorised and regulated by the SRA.
Please note that the SRA still authorises and regulates a genuine firm of solicitors called Duncan Lewis Solicitors and a genuine solicitor called Olivia Amy Rose, who is employed as a Consultant Solicitor at Duncan Lewis Solicitors.
The genuine Duncan Lewis Solicitors and Olivia Amy Rose have confirmed that they do not have any genuine connection to the document referred to in the above alert.
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Misuse of the name ‘Joanna Helen Farrands’ of ‘Moore Barlow LLP’
The SRA has been informed that the identity of a genuine solicitor is being misused on a website at ‘www.fiverr.com’, claiming to offer legal services on behalf of a genuine firm. The SRA has been advised that the username, which was used on the website, is ‘@joannahelenfarr’.
The SRA has further been advised that a member of the public was engaging with ‘@joannahelenfarr’ and was given the SRA number for the genuine firm.
Any business or transaction through the website above using ‘@jaonnahelenfarr’ via www.fiverr.com is not undertaken by a genuine individual or firm of solicitors authorised and regulated by the SRA.
Please note, however, that the SRA authorises and regulates a genuine solicitor by the name of Joanna Helen Farrands and the genuine firm of Moore Barlow LLP (SRA number 487618).
The genuine Joanna Helen Farrands and Moore Barlow LLP have confirmed to the SRA that they have no connection to the website ‘www.fiverr.com’ or the username of ‘@joannahelenfarr’.
BEEN CONTACTED?
Here’s What to Do…
When a firm’s or an 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), may be required in other circumstances.
Compliance Support for Law Firms
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 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
