Every 2 to 3 years, Scottish legal firms can expect an inspection by The Law Society’s Financial Compliance Team of Inspectors. The following series of articles will provide tips on how to prepare and deal with these well.
1 Dealing with an inspection
2 Pre-inspection tips
3 Inspection tips
4 Post-inspection tips
POST-INSPECTION TIPS
So you have received your Executive Summary –follow-up points from your Inspection. What do you do?
Don’t panic!
Your report could be pages and pages long. This does not mean you’ve received a bad report – it means you may have areas to work on, and procedures to update so don’t panic.
Read carefully
Set aside some time each day for the next few days, and deal with each point according to severity. You will see that each point is ‘Graded’ to help you:-
‘WEIGHT: 1’ generally means an issue of low scale or frequency. It should be investigated, and addressed.
‘WEIGHT: 2’ can be an important issue, perhaps due to the nature of the system weakness, the scale of the issue or the frequency of the issue. It should be investigated and addressed promptly.
‘WEIGHT: 3’ is a critical issue. It is an urgent priority, so deal with these first.
Investigate issues
Work with your cashier, legal book-keeper, scottish law accountant or money-laundering reporting officer to find out why the issues have arisen. Amend existing procedures or put new procedures in place to minimise future issues.
Respond ASAP
For some of the points raised, LSS will want to follow these up with you – to satisfy themselves that the issues have been addressed and that you do not become, or remain, a risk to the Guarantee Fund. Plan your responses to each point, and send your reply as soon as is practically possible. You will receive a deadline date, but do it sooner if possible – get it off your plate so you can get back to fee-earning.
Act
An action plan is no use if you do not act on it! Implement your new or amended procedures as soon as you can and record this action in your Law Society file to evidence the measures you have taken to comply.
Ask for help
There is no shame in admitting that you do not understand what is required. Ask LSS to clarify any terminology you are unsure of, and ask them for guidance on points you are struggling with. They have a huge amount of information on the website – www.lawscot.org.uk. The Financial Compliance Team can also be contacted on 0131 476 8177.
Our Scottish Law Accountants will be delighted to speak with you if you are concerned about an upcoming inspection or one that has taken place recently – call us for a friendly, impartial chat.
