COFA Compliance Masterclass
Speaker: Darren Whelan
Length: 2.5 Hours
Published November 26, 2022
Last Updated on May 1, 2023
Who is this training for?
This on demand workshop is for Solicitors, Lawyers, Accountants, Compliance Officers, COFA’s, Legal Accounts Professionals and anyone that has any involvement in working in legal finance and compliance.
Purpose of this training?
Since January 2013, the Compliance Officer for Finance and Administration (COFA) has had significant responsibility for ensuring firm’s meet their regulatory obligations and compliance with the SRA Accounts Rules and that any breaches of the SRA Accounts Rules are documented and reported back to the SRA. In addition to the COFA’s role in relation to the SRA Accounts Rules, the COFA has a duty under the SRA Code of Conduct for Firms to report to the SRA when the practice is in serious financial difficulties. The role of the COFA comes with personal liability.
This on demand workshop will cover the regulatory obligations of the firm, individuals within the firm and the key role of the COFA.
- The background and role of the COFA
- The SRA Standards and Regulations
- COFA responsibilities, record keeping and reporting concerns
- Codes of Conduct – for firms and individuals
- Business Management – Compliance and Business systems
- Assessing risk
- SRA Accounts Rules
- Cooperation and accountability
#1. You instruct a medical reporting agency to obtain copy-medico legal documents on behalf of a client that has been involved in a road traffic accident.
Is this cost a disbursement for VAT purposes or a recharge?
#2. Your firm deals with estate matters and you incur and pay for probate court fees. You also pay for additional copies of the grant of probate. These copies are often sent out to third parties in order to speed up process. You pass the cost of the additional copies on to the estate.
How should you show them and treat them on your bill/invoice?
#3. How is the ‘Current Ratio’ (which is sometimes also called Working Capital Ratio) calculated?
#4. The SRA has stated that it will take a more robust approach towards fines for persistent offenders in regard to the Transparency Rules. What is the maximum amount the SRA can fine a law firm?
#5. Your firm is instructed by the landlord of a new development of commercial properties to prepare the lease agreements. You’re also instructed to receive, and hold in client account, the rental deposits that are paid by the tenants. These will be held until the lease comes to an end and any conditions, e.g. dilapidations, are met.
Is this a breach of the SRA Accounts Rules?
#6. Your firm prepare a lot of wills and fixed fee interviews as one-off transactions for clients. However, instead of opening an individual client ledger for each client, you have a general ledger on which you record the details of each client and the costs received.
Is this a breach of the SRA Accounts Rules?
#7. The COFA must report all breaches to the SRA.
#8. Transparency Rule 4.1 covers the digital badge (sometimes called the clickable logo) which shows any website visitors that your firm is regulated and it gives them a link to the protection that provides. How will a website visitor know if the logo on your website is valid?
#9. You have instructed an interpreter in order for your client to be able to communicate with you or to enable your client to understand Court proceedings. The cost of the interpreter is being passed on to the client. When billed, the cost is:
#10. Rule 1.5 of the Transparency Rules states that certain costs information must be included in the information on the website. Which one of the following does not have to be included in that information?
#11. A solicitor from ABC Law is acting for a farmer who is granting Company X with rights to put a wind farm on his land. The solicitor is advising on the contract/lease outlining the rights of the wind farm on the farmers’ land.
After the contract is completed ABC Law receive rental payments into client account each quarter.
Is this providing banking facilities?
#12. Which 2 options below are most likely to be reasons for deciding if a breach is serious?
Select all that apply:
#13. Is it permissible to issue the client with a bill of costs for an unpaid, not yet incurred, disbursement?
#14. When dealing with residual balances that are £500 or less that are to be paid to a charity, your firm posts a journal from the business side of the client’s ledger and credits a nominal ledger in the name of the charity. You then transfer the residual balance from the client account to the business account.
Once a month, the payment to the charity is made from the charity nominal ledger. Is this permissible under the SRA Accounts Rules?
#15. The COFA is solely responsible for monitoring and controlling financial stability.
#16. The Legal Omsbudsman has the power to award compensation when a client wins their case. What is the highest figure the Legal Ombudsman can award?
#17. Your firm acted for a client in the sale of commercial premises. The transaction has been completed and the firm are in the process of accounting to the client for the net proceeds of sale. Independently of this retainer, the client’s son has instructed another solicitor in your firm to act for him in buying a flat.
The father has asked your firm to retain enough money to cover his son’s legal fees and to send the balance to him. Your firm is concerned that by transferring the money to the son you may be in breach of rule 3.3.
Is this providing banking facilities?
#18. You have paid a disbursement from the business account and now have sufficient money held in the client account towards it.
Are you required to send the client a bill or other written notification of costs prior to transferring the money from the client account to the business account?
#19. The Transparency Rules 2018 form part of the SRA Standards and Regulations 2019 although they were released nearly a year before the Standards and Regulations. Why was this?
#20. Every law firm, regardless of the type of work they do, must have their complaints handing information on their website or in another format if they don’t have a website.
Practice notes and training sessions represent the Association of Legal Compliance & Accounts’ view of good practice in a particular area. They are not intended to be the only standard of good practice that firms can follow.
Practice notes and training sessions are not legal advice, and do not necessarily provide a defence to complaints of misconduct or poor service. While we have taken care to ensure that they are accurate, up to date and useful, we will not accept any legal liability in relation to them.
Frequently Asked Questions
Why On Demand
It’s really simple:
- Reduced cost
- Can be watched anywhere, anytime on any device – no travel time or cost
- Shorter and more efficient than face-to-face
- Recorded and can be replayed at your leisure
Online – the Cons
On Demand is not for everyone one. People learn differently and watching a pre-recorded training video can feel very lonely and isolated. It requires strong, self-motivation and time management skills. There is no opportunity to ask a question and receive an answer straight away as you would with an online or a face-to-face workshop.
No. In order to watch them, you must watch them whilst logged into the website.
