Measuring the impact of Outcomes-focused Regulation (OFR) on firms

Measuring the impact of Outcomes-focused Regulation (OFR) on firms

A number of positives are revealed in a recent survey conducted by the SRA. Most notably, a year after the implementation of OFR and perhaps understandably, firms’ attitudes towards OFR might be shifting towards greater levels of favourability as they increase their experience of working with the new regime of regulation.   
Measuring the impact of OFR on firms released last week found that 50% of respondents felt ‘favourable’ about OFR, a welcome increase on the previous year’s 36%.  However, that still leaves the other 50% to be convinced!!  
Presumably that also includes the 40% who saw nominating a COLP & COFA as the only change required and therefore business as usual, despite a UK Economy that continues to struggle to regain momentum.  Yet 85% agreed that what they do to comply is directly related to the good management of their business and the need to look after their clients’ interests. 
The telephone based survey representing 10%, or 1,000 firms in England and Wales focused on the typical characteristics of firms in England and Wales covering a diverse range of areas of the law.  So just over 80% of respondents had no more than four partners and 50% had a turnover of less than £500,000.  Firms that are perhaps at greatest risk to the increased competitive pressures that many senior commentators have been warning about in recent years. 
Findings in the report are mirrored in the compliance engagements that Legal Eye have with firms.  Many firms are initially confused and clearly unsure of what to do with OFR to see the benefits.
Initial scepticism and concerns are generally voiced around the increased time and cost that compliance is going to take.  Perhaps rightly so, when the regulator has the power of censure, yet has removed the previous route to achievement, virtually at the same time the UK Economy plunged into recession and Fee Earning determines survival. 
However, from our practical experience of working with a large number of firms, the initial investment of time and money into establishing effective compliance mechanisms is rewarded with a greater understanding and awareness of the performance improvements and flexibility that OFR might bring to their business.   A key ingredient, as in anything in life, is in the attitude of the people reflected in commitment and support for effective change.  
This is best demonstrated when change is embraced.  Responsibilities shared equally amongst the team.  From the on-going revision of internal policies, procedures and plans, to a greater willingness to share information, guide and support everyone in the business enabling them to seize opportunities and achieve business objectives.
OFR has served as a timely reminder for many that there are a variety of ways to service client needs and that a client may also have a life-time value, if they are properly engaged.  That has caused many to reassess their strategic plans and objectives, not least because the lenders have also not been so easily prepared to provide the historic financial cushion to the sector.
The future UK Economic scene remains a challenging one with growth across most sectors remaining elusive.  Coupled with a number of new challenges, not least the emergence of new ABS players, the report underlines the fact that the legal sector needs help in recognising the flexibility that OFR might bring to their business.
With reasons ranging from OFR doesn’t offer any real flexibility, or that the outcomes are too vague or unclear to do so with confidence, there are some clear competitive advantages for the 50% of respondents that get help to utilise the benefits that OFR brings.

Legal Eye

Legal Eye works with law firms to ensure compliance and optimise performance. Their extensive and thorough knowledge of the law and regulations will ensure your law firm is compliant and your processes sound. Files are audited to ensure you are not only complying with the service level agreements you have in place, but very importantly, also the code of conduct.

They provide a documented audit trail which is firstly, a requirement of the code of conduct and secondly, essential for PI Insurance purposes and very often for CQS, Lexcel and other quality accreditations. This provides documented evidence of a proactive approach towards risk management. The advice they offer is clear and practical, and they pride themselves on exceptional customer service and unbeatable work quality.

Services include:

  • Specialist expertise across the full range of regulatory, risk and compliance issues to inform your internal decision making.
  • Additional qualified resource where you simply do not have the time to review your regulatory position or to carry out essential ongoing tasks such as file reviews.
  • An online risk hub –  an online resource centre for law firms. The hub provides a comprehensive bank of resources to help COLPs, COFAs, partners, directors and managers to manage risk. It includes precedent policy and procedure documents and templates, access to online training on a range of risk and compliance topics, and a range of useful materials such as ‘how to’ guides, short videos and articles.
  • Drafting and review of key policies and procedures including the supply of ‘document packs’ to save you time researching and writing documentation.
  • Expert advice on how to comply with up-to-date regulation including the very latest requirements complete with a written set of recommendations.
  • Specialist outsourced complaints  handling service provided by former SRA and LeO officers.
  • Gap analysis of your firm’s policies, processes and procedures as they relate to the Solicitors Accounts Rules (SAR) including the production of a written report summarising the strengths and weaknesses of the current arrangements and detailing recommended next steps and actions to put your firm in an even stronger position.
  • Training on SAR and on anti money laundering (AML) as well as other finance-related training which can be delivered virtually for your firm, face-to-face (subject to government guidance) or online via Legal Eye’s Training Academy.
  • A Standard Procedures Manual to provide a practical and comprehensive roadmap for firms to follow when looking to double check whether the current operating procedures are fit for purpose, setting up a new firm – or arm of a firm – or starting a new finance function from scratch.
  • Experienced advice and support for one-off projects such as achieving quality accreditations or switching regulators.
  • Proven high quality training for fee earners and staff held at your office/s covering essential risk topics such as  Anti Money Laundering, data  protection, cybercrime, conflict of  interest and more.
  • Online training from The Legal Eye Academy – core modules available to all staff at their convenience. Includes built-in auto reminder functionality so that you no longer have to chase staff indi-vidually to complete important training. Your package includes free updates to ensure knowledge is always up to date.
  • Added value updates by email to all your key people covering all the latest updates on risk and compliance.

The Legal Eye team includes former solicitors, partners and directors in law firms; former case handlers at regulators such as the Solicitors Regulation Authority and the Legal Ombudsman and experienced risk and compliance professionals.

Contact: Paul Saunder

Tel: 0203 0512 049

Email:  [email protected]

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