The Solicitors Regulation Authority (SRA) mandates that firms providing legal services adopt a system of business management where there is a clear and effective governance structure and reporting lines. Two roles that clients should be aware of are the Compliance Officer of Legal Practice (COLP) and the Compliance Officer of Finance and Administration (COFA).
Legal practices or alternative business structures needing assistance with the implementation of the new professional regulations can seek help from Osmond and Osmond’s experienced compliance experts.
Enhancing Risk Management and Ensuring Regulatory Compliance
One of the basic requirements of the SRA in its new outcomes-focused regulations (OFR) is the appointment of a COLP and a COFA by firms offering legal services, excepting in-house legal teams, to enhance risk management and compliance.
Responsibilities of COLP and COFA
The COLP is responsible for ensuring that the firm complies with all the terms and conditions of its authorisation, with its statutory obligations and recording any failure in compliance with authorisation or statutory obligations and reporting same to the SRA. All material failures must reported as soon as practicable while non-material failures must reported annually in an annual information report.
The COFA also has similar duties with the COLP in terms of ensuring compliance, recording and reporting failures in compliance and statutory obligations to the SRA. However, the duties of the COFA specifically relate to the SRA Accounts Rules.
COLP and COFA Personnel
A major difference between the two roles is the type of personnel that may be appointed into each position. A COLP must be a lawyer of England and Wales, a Registered European Lawyer (REL) or an individual registered with the Bar Standards Board under Regulation 17 of the European Communities (Lawyer’s Practice) Regulations 2000. A COFA does not have to be any of these.
Both positions require the holders to be managers or employees of the firm, who have consented to the designation and been appointed accordingly as a COLP or COFA. This designation must be approved by the SRA. The nominees must also be of suitable seniority and possess sufficient responsibility within the firm to fulfil the roles. A person appointed as a COLP can also act as a COFA provided they have the necessary skills to fulfil both roles and the nomination is approved by the SRA.
It is important to note that the COLP and COFA are not solely responsible for compliance within the firm as every employee has a role to play. However, the key responsibilities fall on the COLP and COFA who must ensure that the firm has systems and controls in place to comply with the requirements of the SRA. These systems and controls should be relative to the size of firm, its complexity, areas of risks and the type of work and client base of the firm.
Ultimately the firm is responsible for compliance and as such, it decides how the COLP and COFA will operate within the business structure.