COVID-19: Advice for COLPs
COLPs have a vital role in managing the impact of the COVID-19 crisis on their law firm. We set out below a short list of some of the issues that COLPs should consider.
- Review and regularly update the risk register. Discuss new or heightened risks at board level.
- Consider new risks and those that have changed as a result of the implementation of the firm’s contingency plans. For example, heavier reliance on email may lead to more ‘fat-finger’ confidentiality breaches. Do your teams know how to report those breaches internally remotely so that the firm can consider a report to the SRA/ICO as necessary?
- Ensure management keeps the COLP appraised of financial stability risks. Cashflow in particular.
- Keep key counterparties, such as the bank and insurer, appraised of your contingency arrangements.
- Are original documents and client files safe while physical premises are largely unoccupied?
- Have phishing and cyber risks been reassessed? There is renewed scope for issues with payments from office and client account in a remote environment.
- Sadly the firm may need to consider how to manage the impact of illness and/or bereavement.
- To what extent did your quality controls rely on face-to-face supervision and/or training. Consider how to manage and ensure proper supervision and training in a remote environment.
- Consider the longer term impact on risk management as remote working arrangements become a longer term solution. These could be major issues such as deep shifts in firm culture and behavioural changes or simpler, operational level issues. For example, will handwritten attendance notes be scanned to electronic files if fee-earners do not attend the office? How are fee-earners protecting hard copies of confidential information that is being generated in their home offices and how will they dispose of it securely?
Does the COLP need to make a report to the SRA?
As always, this depends on individual circumstances. In my view, a firm which has implemented a robust contingency plan which is (for the most part) working well need not report the change in circumstances to the SRA. Your decision as COLP on this issue should be documented and kept under review. This position is supported by the SRA’s guidance on COVID-19 which confirms that it continues to expect the highest standards but it understands that these are ‘exceptional circumstances’ and that it will be ‘pragmatic’.
By contrast, firms that can’t work effectively remotely, that can’t protect clients’ interests and/or firms which are facing imminent financial and cashflow issues are likely to conclude they need to make a report to the SRA. Those firms should look now at the SRA’s guidance on closing down a firm to identify those areas where the SRA is most likely to scrutinise arrangements and those areas which might be most likely to prompt a costly SRA intervention. Hopefully closing the firm down won't become necessary but it is prudent to consider those risks in good time.
COLPs may wish to remind themselves of the individual protections in place for the COLP. Distressed circumstances may lead to greater scope for disagreement between fee-earners/management and risk management teams. In such circumstances the COLP may want to take advice and/or may feel obliged to take action which is at odds with the position favoured by management. This may be complicated further in an international business where there may be different and/or competing regulatory requirements.
What if the COLP is ill?
The SRA expects firms to have anticipated this risk already, and most firms have appropriate arrangements in place, such as a system of deputies. (If you have not given this issue any thought yet, you should do so urgently). The SRA has confirmed that a period of absence of up to a couple of weeks would not require any notification to the SRA but longer term absences would require the temporary/emergency authorisation of a different COLP.
The SRA’s COVID-19 guidance can be found by clicking here and the Law Society’s COVID-19 resources can be found here.
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