Striving for excellence – part 2
In part one of this article, Peter Warner explained how the Law Society’s Lexcel standard provides a range of benefits for local authority legal departments. He now examines how it enables practices to meet their corporate and professional obligations under the Code of Conduct, especially in meeting the requirements of Rule 5 – Business Management.
Corporate and Individual Responsibility
On 31 March 2009, provisions in the Legal Services Act 2007 (the Act) and amendments to the Solicitors Code of Conduct came into force to implement firm-based regulation, requiring all legal practices to be regulated as firms, regardless of size.
Whist primarily aimed at private practice, the provisions of ‘Firm-Based Regulation’ set out the approach of the SRA to both the regulation of practices as ‘entities’ and the regulation of individual solicitors and other employees.
The move to firm-based regulation was intended to enable the SRA to be more proportionate and targeted in its oversight of the profession. The SRA can apply its rules to non-solicitor managers and employees.
For example, should there be a breach of the code, the SRA can determine whether the breach arose because of:
- a failing of the individual manager or employee
- a systemic failure of the practice, or
- a combination of both.
The effect of this change in approach means that there are increasing obligations on those with responsibility for the organisation and management of the in-house legal function to ensure that both corporate and individual obligations and compliance with professional duties are met.
The professional duties of a local government lawyer
Rule 13 of the Code of Conduct governs the obligations and responsibilities of solicitors and Registered European lawyers (REL) who practice as employees of an organisation. More specifically, Rule 13.08 sets out the organisations or persons an in-house solicitor or REL employed by local government may act for.
Rule 13 also specifies the obligations upon in-house lawyers in both the core duties (Rule 1) and the following specific areas:
- Conflicts of Interest
- Management and supervision
- Undertakings
- Equality and diversity
We shall examine each of these obligations and assess how the guidance notes to the Code of Conduct and the Lexcel standard can assist.
Rule 1 – Core Duties
1.01 Justice and the rule of law
You must uphold the rule of law and the proper administration of justice.
1.02 Integrity
You must act with integrity.
1.03 Independence
You must not allow your independence to be compromised.
1.04 Best interests of clients
You must act in the best interests of each client.
1.05 Standard of service
You must provide a good standard of service to your clients.
1.06 Public confidence
You must not behave in a way that is likely to diminish the trust the public places in you or the legal profession.
The SRA regard these core duties as the guiding principles as far as the behaviour and ethics of the profession are concerned. They are seen as a starting point for the substantive rules of the rest of the Code of conduct but also as a framework for guidance. If, for example a solicitor is faced with an ethical dilemma as to the best way to proceed then they should review any proposed course of action in the light of these core duties and ask: “in the light of the core duties, is this the right way to proceed?”
Rule 3 – Conflicts of Interest
Here is an example of a substantive rule that flows from the core duties – 1.03, not to allow your independence to be compromised and 1.04, act in the best interests of each client.
Guidance notes 17-20 to Rule 3 give some examples and suggestions on how any actual or potential conflicts can be addressed. The Lexcel standard reinforces the point as follows: 8.3 Practices will document their arrangements to ensure that conflicts of interest are identified and acted upon in an appropriate manner.
Rule 5 – Management and supervision
5.01(2) If you are a solicitor or REL employed as the head of an in-house legal department, you must effect supervision and management arrangements within your department to provide for:
(a) adequate supervision and direction of those assisting in your in-house practice;
(b) control of undertakings; and
(c) identification of conflicts of interests
5.03 Supervision of work for clients and members of the public
(2) If you are an in-house solicitor or in-house REL and you are required to be "qualified to supervise" under 5.02(1)(c) or (d) above, you must ensure that your law centre or in-house legal department has in place a system for supervising work undertaken for members of the public.
(3) The system for supervision under 5.03(1) and (2) must include appropriate and effective procedures under which the quality of work undertaken for clients and members of the public is checked with reasonable regularity by suitably experienced and competent persons within the firm, law centre or in-house legal department.
The ways in which Lexcel can assist in meeting these obligations are largely contained in Section 6 – Supervision and operational risk management. In particular, 6.1 stipulates that there must be a description of the management structure and that there must be named supervisors with appropriate experience of the work supervised and be competent to guide and assist others – at 6.2.
In order to meet Rule 5.01(2) (a) above on the provision of adequate supervision and direction of those assisting in your in-house practice then the provisions of Lexcel 6.3 require evidence of processes in operation to show active supervision.
The obligations under Rule 5.03 (2) and (3) above can be addressed through Lexcel sections 6.4 and 6.5:
6.4 Practices will have processes to ensure that all those doing legal work check their files regularly for inactivity.
6.5 Practices will have procedures for regular, independent file reviews, of either the management of the file or its substantive legal content, or both.
In relation to file reviews, practices will:
(a) define file selection criteria;
(b) define the number and frequency of reviews;
(c) retain a record of the file review on the matter file and centrally;
(d) ensure any corrective action which is identified in a file review is actioned within 28 days and verified by the reviewer;
(e) ensure that the designated supervisor reviews and monitors the data generated by file reviews;
(f) conduct a review at least annually of the data generated by file reviews, which will contribute to the review of risk assessment data.
Rule 10.05 – Undertakings
Guidance Note 5 to Rule 13 states that if you are an in-house solicitor or REL, you are personally bound by undertakings given in the course of your professional duties. In addition to the individual obligations in regard to undertakings, we saw above at Rule 5.01(2)(b) that there is a management obligation to control undertakings.
Compliance with the Lexcel standard at section 8.7 – Practices will document procedures for the giving, monitoring and discharge of undertakings – can assist the in-house lawyer meet their profession obligations.
Rule 6 – Equality and diversity
6.04 In-house practice
If you have management responsibilities in in-house practice, you must use all reasonable endeavours to secure the adoption and implementation of an appropriate policy for preventing discrimination and promoting equality and diversity within your department. You must take all reasonable steps to ensure that all staff within that department are aware of, and act in accordance with, its provisions.
Although local authorities usually have well-embedded corporate policies in regard to equality and diversity issues together with awareness training, the Lexcel standard again can help meet the obligations of Rule 6 through the requirements of Section 1.4:
1.4 Practices will have a policy on the avoidance of discrimination and the promotion of equality and diversity, to include:
(a) employment and partnership, recruitment and selection, training and conditions of service and promotions within the practice;
(b) the delivery of service;
(c) the instruction of counsel and experts in all professional dealings.
Summary
The general benefits of Lexcel certification are often seen as manifest in meeting best practice in legal management standards through enhanced quality-assured service delivery. The additional specific benefits of compliance with individual and corporate obligations under the Code of Conduct is perhaps a secondary consideration for local authority lawyers but, nonetheless a valuable contribution to the operation of the department.
Solicitor Peter Warner has more than 17 years’ experience of consulting and training with the legal profession. He has worked extensively with the Lexcel standard and was appointed by the Law Society as a trainer to provide updates on Version 4 of the standard. He can be contacted on 07796 262595 or through This email address is being protected from spambots. You need JavaScript enabled to view it..