Posts Tagged ‘solicitors’

Breach alert!

Posted on: June 19th, 2013 by Seamus Gates No Comments
Seamus Gates, Director, MHA Broomfield Alexander

Seamus Gates, Director, MHA Broomfield Alexander

When you properly require payment of office costs and raise a bill to a client (R17.2), the payment of this can often lead to a reportable breach.

If sufficient funds are already on the client account and are earmarked for costs, they must be transferred to the office account within 14 days.

If not, and funds are later received from a client, they can be:

  1. Paid directly into the office account and, by the end of the second working day, the amount due for any unpaid professional disbursements must be used to settle such or transferred to the client account.
  2. Paid directly into the client account and the amount to clear the bill transferred to the office account within 14 days of receipt.

Have you recently received a payment for a bill? Implementing a system to determine the composition of the funds will help to ensure that the payment of costs are dealt with appropriately as above.

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Roles and responsibilities of a COFA

Posted on: June 19th, 2013 by Seamus Gates No Comments
Seamus Gates, Director, MHA Broomfield Alexander

Seamus Gates, Director, MHA Broomfield Alexander

Unlike the COLP, the COFA can be a non-lawyer and the role can be performed by a manager or an employee. However, the  responsibility they will have means it should be someone of sufficient seniority.

They need a good understanding of SRA Accounts Rules and general financial matters. Typically this would be the person performing the finance director role, or in a smaller practice it may be the head cashier or practice manager.

Responsibilities of the COFA

The primary responsibilities are to ensure compliance with SRA Accounts Rules, record any failures, and report significant failures to the SRA. Meanwhile, secondary responsibilities include the efficient running of the finances and the financial regulatory compliance of the practice.

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Solicitors Regulation Authority rules – update

Posted on: January 6th, 2012 by SeamusGates No Comments
Seamus Gates, Director, MHA Broomfield Alexander

Seamus Gates, Director, MHA Broomfield Alexander

Updated rules now accommodate Multi-Disciplinary Practices and external ownership of legal practices:

Out of scope money introduced to Rule 2 and defined as “money held or received by an MDP in relation to those activities for which it is not regulated by the SRA.” E.g. estate agency services, IFA work etc. There is no requirement to include it in client ledgers although firms must be able to quickly establish whether the money is client / office / out of scope, and deal with them accordingly. Firms are permitted to hold this money in office and client accounts but on a temporary basis. The money are not regulated by the SRA, therefore no need to comply with new rules and no need for Accountants to perform any specific testing.

Signing on client account – Rule 21 states that authorities (and client account cheques) may be signed by “an appropriate person.” This person should be suitable and consideration given whether “signing rights should be given to all managers of the practice or limited to those directly involved in providing legal services. Someone who has no day-to-day involvement in the business of the practice is unlikely to be regarded as a suitable signatory because of the lack of proximity to client matters. An appropriate understanding of the requirements of the rules is essential. ” An outside investor cannot be a signatory. Electronic signatories are now permitted, provided appropriate safeguards and controls are enforced e.g. passwords – it is suggested that this access is restricted to partners / members / directors only. If accounts staff are permitted to approve client withdrawals, it is suggested that additional testing is performed.

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