Reflecting, no doubt, the difficult times in which we currently live, the SRA has just published some guidance entitled “Firm closures due to financial difficulties“.
Supported by Case Studies, the guidance sets out the SRA’s approach to the topic and provides details of the support it can provide to firms experiencing financial or other difficulties that threaten their ability to continue trading. The guidance applies whenever firms find themselves unable to trade viably over a foreseeable period, owing to economic circumstances and suggests what actions the managers and compliance officers ought to consider and take.
In the guidance, the SRA explains how they can help firms to achieve an orderly and compliant closure and thus minimise the need for an intervention. They also remind firms of their regulatory responsibilities to report such matters to the SRA. The guidance complements existing SRA guidance dealing with:
- Closing down your practice – practical guidance about how to close down your firm in an orderly way, how to deal with client matters and money, issues around insurance, successor practices and insolvency. It contains a closing down checklist and a list of organisations that you might need to notify.
- Reporting and notification obligations – this explains your obligations around reporting matters to the SRA.
- How we approach a decision to intervene – this explains how the SRA approach decisions to intervene into (or close down) a solicitor’s practice or a firm. It sets out the purpose of an intervention and the legal requirements to be satisfied before they undertake an intervention.