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Future Legal Leaders - Morning Masterclass
Monday 23 April 2012
WIN: What in-house lawyers need
Knowledge, support and networking for the in-house lawyer community
www.dlapiperwin.com
Introduction
Duncan Pithouse
Partner
DLA Piper UK LLP
Introducing WIN's Future Legal Leaders
Our WIN programme originated in 2008, after surveying 400+ in-house lawyers to find out what
they wanted from their external law firms
Survey results led to key elements of WIN programme (What In-house Lawyers Need), which
operates internationally
Key elements of WIN are:
Knowledge: providing you with information that is targeted, relevant and covers key business
issues as well as legal topics
Support: we identify key legal and commercial issues you face and tailor our services
accordingly
Networking: we aim to create an opportunity to share practical experience with other in-house
lawyers
We recognise that as in-house counsel, you face a unique set of challenges. Our Future Legal
Leaders Programme is shaped around those challenges, and aims to support your growth into a
leadership position through an evolving series of events, tools and forums dedicated to your
changing needs
We bring together lawyers from a variety of industries to deliver different perspectives on the issues
you are facing, and encourage you to join our online community at www.dlapiperwin.com
If you are interested in joining our Future Leaders Advisory Committee of in-house lawyers who are
helping to shape the agenda, please email [email protected]
3
What's next for WIN?
WIN: What in-house lawyers need
Knowledge, support and networking for the in-house lawyer community
www.dlapiperwin.com
What's next for WIN
Client Advisory Group and Future Legal Leaders Committee
Client advisory dinners and events where we listen to what you want from WIN
If you want to get involved please email: [email protected] or nominate your interest on the feedback form on
your chair
Future Legal Leaders – Events & training
July (date TBC) – Summer cocktail party (cocktail making class) and networking training from Masterclass
October (date TBC) – Charting your course: Taking control of your career development (2 hour workshop &
drinks)
"Helping you WIN" hotline / online forum for ad hoc queries
A platform for speaking to other in-house lawyers for guidance
This will be launched in the Summer of 2012
WIN Wise - Practical briefings on key topics tailored for you
Our recent editions include Cloudbusting (a checklist when drafting "cloud" commercial contracts), employment
law considerations during the Olympics, and guidance for in-house lawyers considering pro bono
WIN's Heads-of-Legal Roundtable Series
Intimate events aimed at General Counsel / Heads of Legal with a sector / industry focus
The first event will be held on 29 May in conjunction with a partnering professional services firm
Cab Cribs (the App) – available on your mobile devices
We are delighted to launch our first DLA Piper WIN App: "Cab Cribs". This follows on from the hugely
successful "Cab Cribs" guides which are sent to lawyers and contract managers and designed to explain
commonly used legal phrases and concepts
The App is available via iTunes and the Google App store
5
WIN Website – join the discussion
You can register at www.dlapiperwin.com
Join the discussion at www.dlapiperwin.com
for access to:
• Tailored information
• A personal library
• Best practice guides & toolkits
• A secure discussion forum
• Events & training information
• Exclusive invitations
• Recordings & materials from previous
events
For a personal reminder on WIN registration, please drop your
business card in the silver bowl at the side of the room.
A member of our team will be in touch with registration information.
REGULATION
The SRA Handbook and Outcomes Focussed
Regulation
WIN's Future Legal Leaders Masterclass
Michael Pretty, Head of Compliance, DLA Piper
23 April 2012
Overview
Outcomes Focussed Regulation ("OFR") – why and what
The Solicitors Regulation Authority ("SRA") Handbook
The SRA Principles 2011
The SRA Code of Conduct 2011
Structure
Substantive changes
Application to in-house practice
The SRA Accounts Rules 2011
Rule 4 of the SRA Practice Framework Rules 2011
Regulation
What OFR means in practice
Questions
23 April 2012 SRA Handbook and OFR - WIN Masterclass 8
The Legal Services Act 2007
Main effects of the 2007 Act
set consumer and public interest as the key regulatory objectives
obliged regulators to separate representative and regulatory functions
created the Legal Services Board as oversight regulator of the front
line "approved regulators" (The SRA, BSB, ILEX, CLC etc)
vested responsibility for dealing with complaints in an independent
Legal Ombudsman (implemented 6 October 2010)
facilitated new forms of practice:
Legal Disciplinary Practices (LDPs)
up to 25% non-lawyer ownership
interim status, must convert to Alternative Business Structures (put back to 2013)
Alternative Business Structures (ABSs)
full non-lawyer ownership/external participation
first licences issued from October 2011 (by the CLC)
SRA licensed its first 3 ABSs in March 2012
23 April 2012 SRA Handbook and OFR - WIN Masterclass 9
Outcomes Focused Regulation ("OFR")
"OFR amounts to a shift of emphasis from prescriptive, rigid rules
to flexible outcomes-focused requirements …… the way the legal
services market is evolving demands that regulation should focus
more on the quality of clients' experience and less on prescribing
the approach the firm should take"
Charles Plant, Chairman of the SRA Board
The main objectives are:
to facilitate the licensing and regulation of alternative business
structures ("ABS")
to empower firms and solicitors to implement an approach which
better meets the specific needs and expectations of their clients, as
opposed to the one-size-fits-all approach of the Solicitors Code of
Conduct 2007
23 April 2012 SRA Handbook and OFR - WIN Masterclass 10
The SRA Handbook–content and key provisions
Came into force on 6 October 2011
Brings together all the rules which regulate the profession
23 sets of provisions/rules running to over 500 pages
Rewritten to support Outcomes Focused Regulation
The key rules for people in day-to-day practice
The SRA Principles 2011
equivalent to the "core duties" in the Code of Conduct 2007 ("old code")
The SRA Code of Conduct 2011 ("the new code")
equivalent to the detailed rules in the old code
The SRA Accounts Rules 2011 - encompassing the content of
the Solicitors' Accounts Rules 1998
the Overseas accounts provisions from rule 15 of the old Code.
SRA Practice Framework Rules 2011
23 April 2012 SRA Handbook and OFR - WIN Masterclass 11
The SRA Principles 2011
The SRA Handbook is prefaced by 10 "principles" which
define professional standards and ethical behaviour
underpin all other requirements contained in the Handbook
are all-pervasive
First 6 principles reproduce the "Core Duties" from the old code
1. uphold the rule of law and the proper administration of justice
2. act with integrity
3. do not allow your independence to be compromised
4. act in the best interest of each client
5. provide a proper standard of service for your clients
6. behave in a way that maintains the trust the public places in you and
in the provision of legal services
23 April 2012 SRA Handbook and OFR - WIN Masterclass 12
The SRA Principles 2011
Old “Core Duties” are supplemented with 4 new principles
7. comply with your legal and regulatory obligations and deal with your
regulators and ombudsmen in an open, timely and co-operative
manner
8. run your business or carry out your role in the business effectively
and in accordance with proper governance and sound financial and
risk management principles
9. run your business or carry out your role in the business in a way that
encourages equality of opportunity and respect for diversity
10. protect client money and assets
These new principles signal the intentions of the SRA to promote
good governance
self-regulation
equality of opportunity and diversity
23 April 2012 SRA Handbook and OFR - WIN Masterclass 13
The SRA Code of Conduct 2011 - structure
Completely rewritten to support Outcomes Focussed Regulation
Divided into 5 "sections"
1. you and your client
2. you and your business
3. you and your regulator
4. you and others
5. applications, waivers and interpretation
These sections are divided into 15 "chapters"
broadly equate to the old code
deal with familiar topics such as client care, conflicts, confidentiality
and disclosure etc.
23 April 2012 SRA Handbook and OFR - WIN Masterclass 14
The SRA Code of Conduct 2011 - structure
Chapters 1 to 12 comprise:
Outcomes
mandatory obligations
describe what firms and individuals must achieve in order to comply with
the principles in the context of a particular chapter
Indicative behaviours
non-mandatory
describe the type of behaviour which tends to establish compliance
have evidential force when deciding whether an outcome has been
achieved
The structure is new - the content eerily familiar
Most provisions from the old code are reproduced
23 April 2012 SRA Handbook and OFR - WIN Masterclass 15
The SRA Code of Conduct 2011 – what's new
Four substantive changes:
Financial benefits - commission, rebates etc. (chapter 1)
the provision allowing retention if below £20 has been withdrawn
all financial benefits must now be accounted for except by express agreement
Conveyancing conflicts (chapter 3)
the "exceptions" in the old code have been withdrawn (eg. where both were
established clients and had given express consent)
normal conflicts/considerations provisions now apply–effect on panel solicitors
Referral arrangements (chapter 9)
fundamental principles that independence and the client’s best interest be
protected, and of full transparency remain
the prescriptive disclosure obligations have been withdrawn
the exemption for referrals between lawyers has been withdrawn
Fee sharing (chapter 9)
the prohibition on fee sharing with non-lawyers has been withdrawn
23 April 2012 SRA Handbook and OFR - WIN Masterclass 16
The SRA Code of Conduct 2011 – application
For in-house solicitors (and RELs and RFLs)
The majority of the outcomes in chapters 1 to 12 apply but see notes
marked “IHP” for differences
Principal exceptions are some client-facing provisions in Chapters 1
(Client Care) and 2 (Equality and Diversity)
Some key points to note if acting for someone other than your
employer:
only enter into fee agreements which are legal, suitable to the client’s
needs and take account of their best interests (O1.6)
inform clients at the onset of their right to complain and how do to so
(O1.9)
inform clients of their right to challenge your bill and of any liability for
interest on an unpaid bill (O1.14)
comply with the SRA Practice framework rules re PI insurance (IHP1.1)
23 April 2012 SRA Handbook and OFR - WIN Masterclass 17
The SRA Code of Conduct 2011 – application
The new code emphasises good management/governance
Whether you are a manager or an employee, everyone has a part to
play in helping to ensure that your business is well run
more prescriptive obligations in Chapter 7 for those with "in-house
management responsibilities"
Well-run businesses should have little to worry about
"Firms/Solicitors who operated effective policies and procedures to
achieve compliance with the old code are likely to continue to comply
with the new code"
23 April 2012 SRA Handbook and OFR - WIN Masterclass 18
The SRA Accounts Rules 2011
Substantively unchanged by Outcomes Focussed Regulation
Guidance notes are no longer mandatory - critical obligations have
been moved into the mandatory rules
Continue to be presented as prescriptive rules with two exceptions
Client account signatories
the prescriptive list of those permitted to sign on client account has been
withdrawn
discretion allowed to decide who is an "appropriate person"
Payment of interest on client account balances
the prescriptive rules on when and what interest must be paid and how the
amount have been withdrawn
interest must now be paid "when it is fair and reasonable to do so"
firms/solicitors are obliged to set their own policy and communicate this to
clients at the onset of the retainer
23 April 2012 SRA Handbook and OFR - WIN Masterclass 19
The SRA Practice Framework Rules 2011
The situation is largely unchanged for solicitors practising in-house
You can act for your "employer" which includes
a work colleague (rules 4.4 and 4.5) who is or was formerly an
employee, manager, company secretary, trustee, board member of
your employer or a "related body" if
the matter relates to or arises out of the above capacity
does not relate to a claim arising as a result of personal injury
you are satisfied that the person does not want to instruct another lawyer
no charge is made for the services unless recoverable from another source
related bodies(Rule 4.7)
other entities within the your employers Group
joint ventures in which your employer has an interest
trade associations of which your employer is a member
schemes operated by your employer for the benefit of employees
23 April 2012 SRA Handbook and OFR - WIN Masterclass 20
The SRA Practice Framework Rules 2011
(4.1)If you are employed in house you must not act for clients
other than your employer except where you are able to do so
without compromising the Principles or your obligations under
the SRA Code of Conduct, and
(4.2) Subject having an appropriate indemnity in place
Special conditions apply to in-house solicitors acting for clients
(4.10) on a pro-bono basis
new restriction on undertaking reserved activities "unless the provision of
such services is not part of your employers business"
(4.14) providing a telephone legal advice service
(4.16) employed by a law centre or advice service
(4.19) employed by a foreign law firm
23 April 2012 SRA Handbook and OFR - WIN Masterclass 21
Regulation
Success or failure will depend on how the SRA tackles regulation
Change of approach
Old = reactive, tick box, disproportionate, confrontational
New = risk based, targeted, proportionate, supportive but not "light touch"
Risk based approach to regulation
collection and analysis of risks presented by firms, individuals, thematic
risk affecting groups or sectors, reported breaches/risks
targeting time and resources where risk is identified
Restructuring of SRA and re-skilling of staff
authorisation
supervision
enforcement
23 April 2012 SRA Handbook and OFR - WIN Masterclass 22
Regulation - authorisation
Authorisation
vetting applicant firms/individuals and excluding unsuitable entrants
Authorised bodies
recognised bodies – traditional law firms and in-house legal departments
licensed bodies – LDP and ABS
Solicitors of the Senior Courts of England and Wales
Registered Foreign Lawyers
Registered European Lawyers suitability test introduced from 31 March 2012
European Exempt Lawyers
reviewing the suitability of regulated firms/individuals at renewal
recognition and licensing
practising certificates and registrations
vetting applications from new "managers" and officers
members/partners – lawyers and non-lawyers
owners of ABS – corporate and individual investors
23 April 2012 SRA Handbook and OFR - WIN Masterclass 23
Regulation - supervision and enforcement
Supervision
monitoring, anticipating and managing down unacceptable risks to
regulatory objectives
delivered through
relationship management – likely only for large national and global
firms who are perceived to present a risk due to size, complexity and
profile
desk-based review
visits
random or as part of a periodic inspection regime
as part of thematic reviews
as a result of an event
Enforcement
used where a deterrent is needed, and firms cannot or will not deal
appropriately with risks
23 April 2012 SRA Handbook and OFR - WIN Masterclass 24
What OFR means in practice
Following policy and procedures slavishly and to the letter cannot
guarantee that you achieve the outcomes and are compliant
outcomes are contextual by definition
In the absence of prescribed rules, self-regulation becomes
critical
remember the new principle 8 "carry out your role in the business
effectively and in accordance with proper governance and sound
financial and risk management principles"
the SRA expects solicitors and firms to be able to evidence
compliance, manage risk and deal with issues as they arise
everyone has obligations to themselves and their employer to
ensure their own compliance with the new Code
maintain proper record and audit trails for what they do
report any breaches internally (should they occur)
23 April 2012 SRA Handbook and OFR - WIN Masterclass 25
Questions from the floor?
Powerful Presence &
Personal Impact
Effective communication, negotiation and influencing
skills to make an impact in the workplace
Caroline Newman
Questions from the floor?
Pro Bono: Guidance for in-
house counsel
Nicholas Patrick
Partner and International Head of Pro Bono
DLA Piper Australia
Questions from the floor?
Thank you for listening
We appreciate your feedback
Please complete the feedback forms provided on the chair and help shape
the agenda