SRA outline two biggest risks for law firms

SRA outline two biggest risks for law firms

The Solicitors Regulatory Authority). has confirmed the two biggest risks to UK lawyers as bogus law firms and money laundering.

The revelation, made as part of their 2014 risk outlook, comes as a shock, particularly for bogus practices. They did not even appear in last year’s outlook, but have since increased by 57% over the last 12 months. Following on from this, in the first four months of 2014, the increase has shown no signs of desisting. So far there has been a further 235 reports received.

The increase in money laundering has forced the SRA to raise the level of risk. This has been put down to inadequate systems or control over the transfer of money. The risk of money laundering itself is not a new one; however, there is a cause for concern. It is suggested by the latest report that the techniques currently being used and context, in which money laundering is being performed, are constantly changing and becoming more sophisticated.

What did the SRA report say?

The SRA report stated: “We have seen recent cases where law firms have been profiting from offering banking facilities over and above those required for legal work. This may indicate money laundering and is not permitted under the SRA account rules.”

Also on the risk report was more obvious concerns. These included:

  • Increased levels of poor quality and suspicious activity
  • Misuse of money
  • Lack of diverse and representative professionals
  • Declining quality of service to vulnerable clients

Speaking about the report’s overall findings, SRA director of risk, Andrew Garbutt, said: “We cannot totally eliminate risk, and in fact the market will only innovate and grow if firms take firms. The purpose of the outlook is to ensure firms are aware of the risks they may face and help them to plan ahead.”

Image Source(s)
Filed under: All