Staying compliant with SRA financial regulations

As a law firm operating in the UK, your practice must meet certain requirements set out by the Solicitors Regulation Authority (SRA).

These regulations are set out to protect client assets and the integrity of your firm while ensuring the SRA holds up to date information about your practice.

Compliance with these regulations, aside from being compulsory, indicates to clients that your firm is financially stable, well-managed and keep their safety in mind.

In order to stay compliant and avoid the risk that comes with regulatory breaches, it is important that you consult with a specialist in law firm accounts, as the unique complexity and tight regulations mean that an error is easily made.

Accounting regulations

The SRA Accounts Rules, governing the management of client money, are put in place to protect clients and must, without exception, be adhered to.

These rules require that client funds be kept separate from the firm’s money, with the need for regular reconciliations and accurate record-keeping.

The potential for financial mismanagement or errors is significant without rigorous controls and systems in place – but we can help you to set up and maintain these systems.

The need for transparency

The SRA also imposes Transparency Rules that require law firms to provide clear, accessible, and upfront information about the costs of their services.

This includes detailing the basis for charges, likely disbursements, and the average cost or range of costs for services.

A specialist can help you to develop the right pricing models to comply with these rules, as well as implementing practices that enhance the clarity and accessibility of this information.

This can enhance client trust as well as regulatory compliance.

Anti-money laundering regulations

Compliance with anti-money laundering (AML) regulations is another critical area where specialist advice provides significant value.

You must have robust systems and controls in place to detect, prevent, and report instances of money laundering.

There is substantial risk to you and your clients if you fail to do so, not least as your firm (provided it falls under the scope of the Act) could be liable for prosecution under the Economic Crime and Corporate Transparency Act 2023.

SRA rules are put in place to protect your firm and your clients’ activities. However, they can present challenges for firms, particularly in the areas of financial reporting, record-keeping and fiscal transparency.

As specialist financial advisers to the legal sector, we can support you in implementing the right policies and procedures to ensure that your firm meets its statutory requirements while keeping clients’ money secure and maintaining your reputation.

Please don’t hesitate to contact our team for support with SRA rules around financial reporting and management.