The compliance team (whether that is the COLP and COFA working on their own, or a committee selected from members of the firm, or a team of compliance specialists) must complement the business in which it operates. This in turn requires everyone in the business to work in a supportive manner with the compliance team rather than fighting against them or not involving them in decision-making. Easy for me to say! How is this achieved in practice?
My reflections on what’s needed are based on my experiences over the past couple of decades. I have witnessed a noticeable change in attitude to regulatory compliance and a revolution-like transformation in firms’ attitudes to the business-end of their work. There is a need to be open to the concept that being a good lawyer is not all that’s needed to survive and prosper in the legal services industry these days. Amongst other things, it is necessary to acknowledge that a good lawyer must work in a compliant way amongst like-minded colleagues.
Why? The bottom line, or the persuasive argument for compliance, is actually very simple. Without a commitment to understanding and upholding regulatory compliance standards, the firm will quickly lose favour with the SRA with consequences for the ongoing survival of the business. The firm may find its authorised status is subject to scrutiny. This in turn may have financial repercussions for the owners of the business who will be unable to deliver services to clients. This means that compliance is good for business. Who could argue anything else?
Of course, reaching this position of harmony between the compliance team and the rest of the firm, does not simply happen because an individual is given a compliance title and a desk within the building. Effort is needed to make the compliance function an effective one.
Here are some of my reflections on how this happens:
It is necessary to be very clear about the purpose of compliance
Perhaps more specifically, it is necessary to explain the need to be compliant with regulatory standards in language that is easy to relate to (hint: using SRA-speak rarely appeals to anyone, not least partners who will need to budget for compliance and colleagues who may feel it is a distraction from their day jobs). The message can be conveyed quite simply: your firm is only able to open its doors, and invite paying clients over the threshold, whilst it is regarded as a safe harbour for legal services. You need to comply with regulatory standards to stay in business.
The compliance team does not own the responsibility for achieving regulatory standards
The role of the compliance team is to facilitate the right behaviours within the firm which make this happen. Ultimately, however, it is the owners of the business who own responsibility for compliance. Let’s face it, the owners have most to lose (both financially and in terms of their reputation) if things go wrong so why wouldn’t they accept the need to promote a compliance culture within their business. It’s one less thing they need to worry about if they are satisfied that they can rely on their employees to do the right thing.
The owners of the business must be seen to be behaving properly
It’s risky to suppose that a ‘do as I say not as I do’ attitude will work. The owners need to lead on this topic by example. This requires a zero tolerance attitude to the lowering of standards, not turning a blind eye to the colleagues who are mavericks or too difficult to manage, supporting colleagues who may have ethical dilemmas, encouraging openness and accountability, conducting arguments about compliance behind closed doors and out of earshot of employees, plus acknowledging that there may be regulatory risks attached to commercial decisions.
The compliance team must have a role in decision-making
Of course, all businesses must make commercial decisions, take strategic risks, consider business plans and profitability every day. Law firms are no exception. Law firm owners, however, must also consider whether a decision has a regulatory twist or repercussion. Doesn’t it make sense for the compliance team to be privy to this level of decision-making and to be able to add to the making of informed choices through a discussion of regulatory impact? This is not to say that the compliance team is the decision maker; rather that they should add their subject knowledge to the deliberations. An effective compliance team will be used by the firm in this way and will have access to decision-makers at the right time.
There must be an acknowledgement that compliance plays a central role in the firm’s continuing survival and is not a backroom service
This is a change in law firm dynamics for most practitioners. It is still not unusual for compliance to be seen as a drain on finances and resources, a necessary evil, even a team that stifles growth. In fact, an effective compliance team serves a completely opposite purpose. By facilitating compliance with regulatory standards, the team is encouraging and supporting the longevity and continuing success of the firm. This means that the personnel employed in the team must have soft skills as well as technical know-how. They must be ‘go to’ and approachable. They must be able to influence people and be good communicators. They should position themselves in such a way that they will always know what’s happening in the firm.
An effective compliance team will demonstrate its value to the business. It is created to ensure that the working environment is a safe place in which colleagues can be employed, protected from regulatory censure and able to work in a way that promotes profitability and sustainability.
Exeter Family Court Clinic Opening Soon!
A clinic has been created to provide limited free support to LiPs and we are looking for volunteers to help with this new initiative. Opening in May, the clinic will run monthly at Exeter Combined Court. The clinic aims to help prepare LiPs for hearings and raise awareness of how the Family Court works. We will provide this support service to LiPs involved in child arrangements or domestic violence proceedings by means of short pre-booked appointments. It is not extended to cover LiPs in financial remedy or care proceedings.
The development of the clinic has been driven by barristers and solicitors, who will work in partnership with the Personal Support Unit (PSU) in Exeter and the Bar Pro Bono Unit. The PSU, who give practical and emotional support to LiPs, will manage the booking processes and provide clinic volunteers with details of clients for conflict checking. More than 15 lawyers have signed up, volunteering at least a half-day a year to the scheme.
Solicitors will need to arrange to operate under their firm’s indemnity insurance and a detailed protocol covering the operation of the clinic has been created, drawing on the work of the Bristol Pro Bono Scheme.
The clinic organisers welcome expressions of interest from family solicitors who would like to support the clinic.
Please contact Carol Mashembo, Magdalen Chambers on 01392 285200.
We are holding a Launch Party at Exeter Combined Court on 19th May 2017 from 4-5pm. If you would like to come, please RSVP to exeter@thepsu.org.uk by 12th May 2017.
Exeter Family Court Clinic
Launch Event!
You are warmly invited to attend the launch of a new family law clinic in Exeter
Friday 19th May, 4pm – 5pm
Exeter Combined Court Centre, EX1 1UH
With an introduction from Designated Family Judge, Her Honour Judge Robertshaw,
a brief talk about the clinic, and time for questions.
Tea and coffee available, courtesy of Magdalen Chambers.
A raffle to support the PSU’s involvement in the clinic will be held,
so please bring some change!
Please RSPV by 12th May: exeter@thepsu.org.uk
Donations of raffle prizes very welcome!...
LawCare - Mental Health: Are we Thriving or Surviving?
Mental Health: Are We Thriving or Surviving?
We all have mental health, just as we have physical health. Mental healthincludes our emotional, psychological, and social well-being, and affects how we think, feel, and act. It also helps determine how we handle stress, relate to others, and make choices.
Mental healthissues range from the worries we all experience as part of everyday life, to serious long-term conditions. It can be easy to dismiss mental health problems as something that happen to other people, but research shows that 1 in 4 of us will experience them each year. And the legal community is no exception.
Many legal professionals are reluctant to talk openly about mental health in the workplace, for fear they may be perceived as weak or not coping with the demands of their role. At LawCare we know that talking is an important first step in changing the way we think and act about mental health. We want to get the legal community talking about mental health so that anyone who has a problem can get support.
The theme for Mental Health Awareness Week, which runs from May 8 -14, is Surviving or Thriving? and this year, rather than asking why so many people are living with mental health problems, the aim is to uncover why too few of us are thriving with good mental health. Good mental health is more than the absence of a mental health problem: people are struggling to cope with the demands of life, and are stuck on getting through the day.
In terms of thriving, resilience is now recognised as an important factor in the workplace. In the increasingly demanding and changing legal environment, resilience is important in order to thrive. Resilience is defined as the ability to resist or bounce back from adversity, and in any workplace there will be people who thrive on challenges and difficulties, while others will find it hard to cope with unexpected change or problems. If someone finds it hard to forge ahead when things go wrong, the good news is that we can all learn how to develop resilience, and it’s not that difficult.
Highly resilient people are flexible, adapt to new circumstances quickly, and thrive in times of constant change. Most importantly, they expect to bounce back, and feel confident that they will. That expectation is closely linked to a general sense of optimism, and finding the positive aspects in most situations is a skill that can be evolved: the right mental attitude to cope, and even flourish, when the going gets tough, can be developed.
Ten tips to build resilience:
Learn to see challenges, mistakes and failures as valuable learning experiences
Give ourselves a pat on the back when things go well. Be kind and forgive ourselves when things go wrong
Don’t give in to negative thoughts. Challenge them, and ask whether they are true or realistic
Use humour to defuse and downplay difficulties. We can laugh at ourselves and situations
Be flexible. Recognise that nothing stays the same, especially in the workplace
Take care of physical and mental health. Get enough sleep, exercise and eat well. When our physical self is in good shape, we are less fragile
Take time off work, use holiday entitlements and take breaks during the working day
Recognise that a bad situation is usually temporary
Build a support network. Make time for friends and family who offer encouragement and strength. Consult supportive work colleagues
Don’t extrapolate one bad situation into another unrelated situation. We can’t be good at everything, recognise areas of strength
Attitude and perspective are fundamental to building resilience: paying attention to strengths and how to develop them, learning to accept that things won’t always go well, focusing on what is working rather than what’s not, and we will all be on our way to thriving, rather than just surviving.
We need to com...
News from the Devon & Somerset Junior Lawyers' Division
This month's article has been written by the JLD's Charity Representative, Jessica Tallon.
As Charity Representative of the Devon and Somerset JLD, I actively encourage JLD members to raise money for the JLD charity of the year through organised charity events and JLD social events.
In November 2016, the Devon and Somerset JLD committee voted for YMCA Exeter to be their charity of the year for 2017. YMCA Exeter supports young people in Exeter through a wide range of Youth Services including homelessness support, youth clubs and a mentoring scheme for ex-offenders.
To get our fundraising efforts off to a good start, 7 JLD members set themselves the challenge of participating in the YMCA Sleep Easy 2017 event which involved spending a night sleeping rough in the grounds of Exeter Castle on 4 March 2017. Despite the terrible weather conditions with strong winds and rain throughout the night, our participating JLD members spent the night sleeping on the cobbles with nothing but a sleeping bag and a cardboard box. The JLD set themselves a fundraising target of £500.
I am pleased to report that the Devon and Somerset JLD raised an incredible £830 for YMCA Exeter, smashing their initial fundraising target of £500.
Upcoming charity events
On 9 May 2017, the Devon and Somerset JLD will be hosting a wine, cheese and charity quiz night to help raise money for YMCA Exeter.
Additionally, the Devon and Somerset JLD will be hosting a vintage Hollywood themed summer ball on 9 June 2017 at Sandy Park. This will be a fantastic event including a three course meal, charity raffle, photobooth, jazz band and DJ.
Details of the above events will be emailed to all Devon and Somerset JLD members shortly.
If you require any further information or would like to get involved in any of our fundraising events, please do not hesitate to contact us at dsjld17@gmail.com....
Admissions Ceremony 2017 Invitation
DASLS Newly Qualified Solicitors Admissions Ceremony
Monday 9th October 2017
at 5.30pm for 6pm at Exeter Guildhall — by invitation only!
Did you / will you qualify between 1st September 2016 and 30th September 2017?
If so, please contact Monique Bertoni at DASLS office
to make sure that you receive your personal invitation.
Email: Monique@dasls.com or call 01392 366333
Devon & Somerset Law Society would like to congratulate
all NQ Solicitors from Member Firms in DASLS area.
Below photo of the 2016 Admissions Ceremony
...
Dear All,
This year really is flying by. I have just had my birthday.
After updating you previously on the excellent catch up I had with the Law Society CEO Paul Tennant on his visit to the south west last November, I had not expected to be back in touch with him quite so soon.
Sadly, this time it was in less happy circumstances.
I was, like many of you, shocked and saddened in January to hear the news and see the pictures of the substantial fire at Chancery Lane in London. I have emailed Paul Tennant and James Shepherd, our Law Society Relationship Management Executive, to send our best wishes and we are hoping that the building will be back to full use very soon.
As I write this report, preparations are in full swing for the 2020 DASLS Legal Awards & Dinner. As you know the Annual Dinner is being held again this year at Exeter Cathedral. The event is to take place on the 30th April 2020. After the success of last year, we are hoping that once again the event is sold out which would mean we will have around 480 people attending. If you have not done so already, please contact Llew Nicholls and the team at our Awards partners ‘Grow Marketing’ who have worked very hard alongside our very own Tony and Monique to achieve full sponsorship of this event.
You can contact Llew to book the remaining places by emailing Llew directly at Llew@growmarketinguk.com. There have been more nominations than ever before with more entries making the short list. Please do not miss this dazzling occasion.
You will all have received DASLS latest 2020 training courses programme. Tony Steiner and the team have worked hard to arrange these events. You will see that as members you get preferential rates and if appropriate reduced rates for multiple attendees from your firms. Please take advantage of these services as a proportion of the monies do go to support our Society’s broad continuing education offering.
If I do not see you individually before I look forward to catching up with you at the 2020 DASLS Legal Awards and Annual Dinner in April.
With very best wishes
Nigel Lyons
President 2019-2020...
The first big social event of the year was the annual DASLS Quiz which is the grand finale of the Challenge Cup. It is an event I thoroughly enjoy and I make no apology for making it a bit challenging.
This year did not disappoint there being just ½ point between first and second place and resulting in joint winners of the Challenge Cup. Congratulations to Ashfords and Michelmores both of whom knew that the study of birds’ eggs is Oology. The next Challenge Cup kicks off with the usual Skittles match in Dawlish when the magnificent Skittles Cup will be contested.
The latest meeting of the County Societies Group took place in February when we were guests of the SRA in Birmingham. DASLS Deputy Vice-President Adrian Richards and I attended. We were welcomed by their Chief Executive Paul Philip who set out some key messages around SRA activity emphasising their desire for light touch engagement with solicitors and good channels of communication. He said that the SRA was working well with The Law Society and was focused on creating an environment where solicitors could be innovative and use the latest in technology. AML is a key area of activity and following the appointment of the new Chair, Anna Bradley, they are working to provide better customer care. He also explained that until now the SRA had not taken any position on issues such as Access to Justice, Rule of Law and Advice Deserts. They were considering looking at, and taking a position on, one or two of these issues each year. There followed several presentations by senior staff at the SRA dealing with Enforcement Strategy and reporting concerns; Customer information – Transparency Rules and clickable logo.; the SQE and Anti-Money Laundering. Comprehensive slides were produced to accompany each presentation which I will forward together with my notes to any member who wishes to see them. Just email me —tony@dasls.com. There followed an interesting tour of the building. SRA have around 600 staff members with the majority based over three floors at the Cube. The next meeting of the County Societies Group will be in the summer and we also plan a Parliamentary Liaison event at Westminster later in the year.
I am pleased to announce that DASLS has two new Partners; Moneypenny who look after your telephone calls when you are not available and Dictate Now who offer Dictation Systems and outsourced document preparation. They join our current Partners: Alchemy; PKF Francis Clark; Landmark; Lockton; Unoccupied Direct; WebBoss and Wessex Searches. We are thankful for the support our partners give us and encourage you to use them where you can.
Depending when you read this our joint event with the Legal Sustainability Alliance on 5th March will be about to take place or will have passed. Regular readers will know that the Society has formed a small working party to encourage and identify how firms can improve their sustainability. The main Committee have suggested that this forms a Sub-Committee. We will arrange a meeting of the working party after the event on the 5th March with a view to progressing this. Anyone who is interested in this please let me know.
Tony Steiner,
Executive Director DASLS....
You may know that DASLS is fortunate to be twinned with Bilbao, Erlangen, Gdańsk, Leuven, Rennes and Verona. Such twinning arrangements underpin a sense that we belong to one community of values on the basis that these relationships are based on reciprocity. Each year, we meet to discuss and debate important legal issues of the day, whilst discovering the cultures and languages of our partners. 2020 is DASLS turn to host such an event, which will be rounded off with the Sunday Legal Service at Exeter Cathedral on 7 June 2020 and to which DASLS members are cordially invited!
The subject of our conference (on 5 June at County Hall in Exeter) will be around the impact of artificial intelligence (AI) in the sphere of human rights. Rather than understanding AI in terms of a terrifying post-apocalyptic vision of a world controlled by robots, AI features in our everyday lives from Alexa and smart home devices to controversial facial recognition technologies and even Uber! AI is built by lines of code called algorithms. Put simply, an algorithm is a step by step method of solving a problem and is commonly used for data processing and calculation. However, the use of automated data processing techniques in public and private sectors, especially by internet platforms and its impact on the exercise of human rights is somewhat of a hot topic.
When it comes to AI, there is a focus on the usage of huge datasets. AI bias means when an algorithm produces results that may be prejudiced due to erroneous assumptions in the machine learning process and the data used to train the algorithm by data scientists. Bias runs deep in humans and it can be unconscious in nature. AI systems are created by individuals who have their own unique experiences and blind spots all of which can lead to fundamentally biased systems. This issue is compounded by the fact that those responsible for AI (including its deployment and training) may not be representative of society. Accordingly, unfair treatment of a group can result from the use of an algorithm to support decision making whether that decision relates to criminal sentencing, loan applications or self-driving cars.
The language of AI is undoubtedly complex, but it is drastically changing the way we live. Understanding AI and its implications in the context of its growth is important so that we are all better placed to push companies to develop new technologies both ethically and responsibly.
If you would like to receive more information once the June 2020 programme is finalised, please contact Monique Bertoni at DASLS office – monique@dasls.com .
Emma Mitcham
Chair, International Relations Sub-Committee...
New AML Regulations and the pursuit of the beneficial owner.
Introduction
The new Money Laundering & Terrorist Finance (Amendment) Regulations 2019 which came into force on 10 January have modified a number of aspects of the 2017 AML Regulations, with which we have been complying for some time. However, many firms’ procedures hark back to the earlier days of the 2007 Regulations and have not been modified or updated much over recent years.
This article seeks to set out what the new Regulations in fact require, and the steps we should be taking in relevant cases.
The Policy
It has been true for some time that the ultimate aim of all the regulatory rules is transparency – it has always been the case that the use of artificial structures such as trusts, companies, bearer shares, foundations and charities – whilst perfectly legal – have to some extent also benefitted from the extra anonymity they offer to the true owner and recipient of the funds and services we provide.
If we offer services to these types of entity, the Regulations require us to go some way to identifying the individuals who are actually benefitting from our services, and this entails uncovering the true ownership of the organisation.
Whilst this would be difficult in many instances – Cayman Island companies with bearer shares, for example – we must nevertheless attempt to get some assurances from the creators of the companies, accountants or registrars as to the ownership of the shares, and have some way of being notified of any change in ownership.
We also need to be aware of the PEP and Sanctions status of these individuals.
Further, for UK companies, the PSC Regulations 2016 impose an exactly similar obligation on the companies themselves to identify their beneficial owners and notify Companies House of any shareholder with 25% or more of the shares or exercising control over management of the business.
The Regulations
The Regulations provide that we must, as part of our CDD procedures
Identify the client – this means coming to know who they are, by name and some other characteristic, e.g. address, date of birth, date of incorporation
Verify that identity – by means of reliable and independent data and documentation
Identify the beneficial owner (if the client is an entity) – though not necessarily verifying that identity
Identify and verify the identity of the person actually instructing us (if not already done).
What this means for us
When acting for a COMPANY (that is not a listed company) the Regulations require us to obtain
Details of the company as registered (which must be proven by a copy of the register entries available from Companies House or equivalent registry) –
name, number, registered office address, principal place of business
the law to which it is subject
details of its governing documentation (its memorandum)
names of the directors.
Names of any beneficial owners, and the identity of any individual owners of legal entities which own the client
Names and verification of the persons instructing us on behalf of the company, and their authority to do so.
Note that we cannot rely on the information provided by the company under the PSC Regulations but we must undertake our own research in order to fulfil our CDD duties.
Further, if as part of that research, we discover that the Companies House data on PSC’s is incorrect, then we are now under a further obligation to notify the Registrar of Companies of this fact.
We also need to establish that PEPs and Sanctions checks are also undertaken. If genuinely positive entries are revealed in response we should undertake enhanced CDD steps or cease to act, accordingly.
Electronic searches are a permissible avenue to use provided the search provider can offer us the necessary assurances that the person actually claiming an identity is IN FACT that person. Check also whether ...