The Solicitors Regulation Authority (SRA) has indicated that it will take tough action against failing firms that do not take steps to wind down efficiently. Sanctions could include putting conditions on the practising certificates of those responsible.

The message came at a conference on compliance where SRA director Samantha Barass stated that an increasing numbers of firms are at risk of collapsing due to financial instability with about 150 currently experiencing ‘very significant financial difficulty’. She pledged to take a ‘hard line’ on compliance officers and other senior individuals responsible who fail to try to combat these risks.

It is vital that firms take practice closure seriously. Steps need to be taken to ensure that financial risk is managed, clients are protected and the reputation of the profession is not damaged. This includes ensuring that client funds are kept safe, making arrangements for active matters to be transferred and ensuring that professional indemnity runoff cover is put in place.

It is vital that firms recognise the importance of early engagement and full co-operation with the SRA and to act quickly, removing or suspending individuals who have failed to act with integrity. Firms in insolvency must wind down ‘responsibly’, taking proactive steps to deal appropriately with archived files and seek arrangements for the transfer of live files to other firms.

The Lawyers Defence Group has an expertise in assisting firms with the issues surrounding closure and can help them to ensure that they deal with all aspects in an orderly manner. We can advise on the actual steps to be taken, provide practical assistance during the closure process, liaise with the SRA to prevent their active involvement – or worse still an intervention – and help to ensure that at the end of the day those involved are in the best position that it is possible to be.

For more information either email help@lawyersdefencegroup.org.uk or phone us on 0333 888 4070.