COVID-19 has shaken up the legal industry in so many ways, and law firms have had to be reliant on their pre-existing systems and processes to maintain some sort of norm.
During a recent webinar on COVID-19 and other compliance issues (still available to watch on YouTube!), the SRA talked about five topics that they have received lots of queries on. Their comments included the following:
Cash flow
The coronavirus business interruption loan scheme (CBILS) has been used by many firms, but in many cases there is still quite a wait between making the application and receiving the funds. The SRA reminded firms that HMRC support is available to all firms, including deferring your VAT payment and partners’ July tax bills, utilising furlough and applying for time to pay arrangements on PAYE/NIC and corporation tax.
Compliance
There have been several issues that have come to the forefront on this, as well as many questions over the Accounts Rules. The SRA has confirmed that delays in Accountant’s Reports being delivered as a result of COVID-19 will not result in any breach or disciplinary action. There is also, currently, not a requirement for the COLP/COFA to inform the SRA if this is indeed the case.
The wording ‘prompt’ that features in the Accounts Rules means essentially to ensure that firms do their best to protect client monies, and clearly document each stage of the process, and keeping clients informed.
Should the COFA/COLP need to take an extended time off, of say a month or more, the SRA will need to approve a temporary/new role holder.
Another issue, given clients cannot be met face to face, has been money laundering requirements, and the legal sector affinity group (LSAG) has produced a helpful document on this.
Employment
Staff have always been any law firm’s biggest asset. Employed staff of course can be furloughed, and the SRA stressed that management of your own staff in this pandemic is just as important as ensuring a sustainable bank balance. Interestingly, there is potential for furloughed staff to carry out pro-bono work, and LawWorks have provided guidance on this.
Location
Remote working – another area that is creating much debate and discussion, and this includes a whole banner of considerations; IT equipment, IT environments, home office requirements and supervision (the SRA have no strict rule on these as long as the arrangements are sensible and appropriate meaning that client service is competent).
Succession and continuation
Finally, the SRA encouraged firms to ensure that thought is put into succession and business continuity, and business plans should be at the forefront of owners’ minds. What might happen if a partner becomes ill? What might happen if the accounts team becomes ill? Have you thought about future plans after this?