It ain’t what you do, it’s the way that you do it
It goes without saying that following the increase in self-regulation, it’s not a question of whether you audit, it’s how you do it.
In this blog, I hope to help highlight some of the considerations and decisions you will need to make to have an effective file auditing programme. One of the important decisions you will need to make is whether to outsource or not but before we get to that, there are some other considerations.
Purpose
One of the first things you need to think about is what purpose your audit programme is intended to achieve. This may seem simple initially but the more you think about the question, the more possibilities arise. Some of the initial basic requirements are likely to be:
- To help to measure compliance with the various regulations.
- To provide evidence of compliance to the regulatory/accreditation bodies.
- To maintain consistent quality standards which will ensure high customer satisfaction.
Some of the other factors which you may want to consider are:
- To help with performance management against KPIs.
- To measure and assess the viability and profitability of systems and processes.
- To act as a training tool to assist with compliance development firm-wide.
Criteria
When you have developed the purpose, it’s much easier to create objective criteria. Regulatory requirements can be vague and subjective. For example, how will you objectively and fairly audit compliance with Rule 4.2 of the SRA Code of Conduct for Firms in the SRA Standards and Regulations which states:
“You ensure that the service you provide to clients is competent and delivered in a timely manner, and takes account of your client’s attributes, needs and circumstances.”
The rules do not contain definitions or guidance on what is classed as a “timely manner” and we would probably each take a different view.
One of the biggest mistakes many firms make is failing to develop robust, objective and consistent audit criteria. This is particularly the case with internal auditing. As fee earners, whilst we may work within the same team on the same type of work as others, our approach is often different. This is only natural and is ultimately what makes us good lawyers. However, asking fee earners to review each other’s files without objective and consistent criteria is a minefield as (often with the benefit of hindsight) we all think we could have done things better! Give the same file to 5 different fee-earners and ask a subjective question like “was the file well run?” and you will get 5 different responses!
Another problem with less than robust criteria is that the measurements and evidence you get will not stand up to scrutiny from your regulator. If you have strong evidence of a consistent and objective approach to measuring the outcomes, then there will be little that the regulator can argue with – after all, in the SRA’s own words in the introduction to the SRA Standards and Regulation, they state “Our shorter, simpler Standards and Regulations focus on high professional standards and protecting the public. They also put more trust in your professional judgment and give you more choices over how and where you work.”
There are many other factors which make up a good audit programme and we would be happy to discuss these further with you – just give us a call or drop us an email to discuss.
Now to turn to the decision whether to outsource or not.
In or Out?
There are most certainly pros and cons to both approaches, so let’s examine them…
Internal
| Pros | Cons |
| Can increase ‘buy in’ to compliance | May be demotivating |
| Can improve understanding of compliance | May be time-consuming |
| Can allow greater understanding of performance | Is not independant |
| Can allow greater control of compliance | May result in inconsistent evidence |
Outsourced
| Pros | Cons |
| Is independant | May not increase ‘buy in’ to compliance – may be viewed as ‘being done to’ rather than ‘being involved in’ |
| Can provide clear consistent useable evidence | May not improve understanding of compliance |
| Can be more cost effective | May result in ‘tick box’ compliance |
| Can give directed specific reporting information | May not give control over compliance |
The Solution
We believe that the ideal solution is a combination of the two approaches, an audit programme specifically developed for your business which allows for an element of both internal and outsourced auditing – perhaps even on a ‘rota’ basis so that each fee earner takes a turn in getting the experience and knowledge of compliance to make them better fee earners. Balance this with independant outside auditing and the result is a robust system which shows detailed evidence of compliance with your regulatory requirements.
Whichever decision you make, Beyond Compliance Limited can help ensure that you develop a clear, objective and consistent audit programme which ensures that you comply with all of the regulatory and accreditation requirements. If you’d like to discuss your programme and audit requirements further then please give us a call on 0121 288 5227 or email us at [email protected]
And no, we’re not going to apologise for putting that song in your head for the rest of the day 🙂
