The Importance of Effective Supervision – Part Two

In continued partnership with Paragon, Weightmans’ Compli team – who provide bespoke risk management and compliance consultancy services – has produced a two-part paper discussing the importance of effective supervision, the SRA’s supervision guidance note and suggested top tips on implementing an effective supervision strategy. In part two, Michelle Garlick, Head of the Compli team at Weightmans, discusses the SRA’s guidance note on effective supervision and offers tips and takeaways for firms.

In November 2022, the SRA published a detailed guidance note on effective supervision. It was a timely reminder of our obligations because, in January 2023, the SRA made it very clear in its response to the LSB’s statement of policy on ongoing competence that it will start collecting firm data on first-tier complaints and professional indemnity insurance claims, will do spot checks, and conduct audits and file reviews and as part of that, will expect to see evidence of supervision, quality checks and training records. In the same way, as it is difficult to defend PII claims if there is no evidence of what was said/done on the file, so it is for defending any action brought by the SRA for supervision failures.

The key points of the guidance to note are that if you are a qualified solicitor supervising client work, you need to do so effectively, and you remain accountable for the work done by those you are supervising. You also have to make sure that they are competent and that they keep their knowledge and skills and their understanding of legal, ethical and regulatory obligations (3.5 and 3.6) up to date.

There are similar provisions in the Code for Firms (4.4 and 2.1) to ensure that firms have effective systems and controls in place to comply with all legislative and regulatory requirements, including supervision. Remember also that regulated work must be supervised by at least one person who has practised as a lawyer for at least three years.

The latest SRA guidance sets out four key themes of the approach the SRA expects a firm and its managers to follow when considering supervision. It also gives guidance on particular situations and areas of legal work as well as good practice examples. Whilst there isn’t anything new or ground-breaking in the guidance, it highlights lots of common-sense suggestions that are worth considering in your firms when applying a risk-based approach, based on the type and nature of the services you offer.

It is a must-read for COLPs, supervisors and those responsible for training.

The four key themes

The four key themes that the SRA addresses are:

1. The need for supervision

The guidance stresses the accountability point already mentioned and the requirement to have at least one appropriately experienced person supervising the legal services.

2. Appropriate supervision arrangements

It encourages firms to adopt a risk-based approach and sets out a list of factors to think about, including:

• Risks for clients (loss of life/liberty/limited scope for redress?
• Specific legal/regulatory requirements on who can supervise (e.g. reserved activities, immigration/claims management activities).
• Inherent risks – exercise of judgement v routine/administrative work?
• Client’s circumstances/vulnerabilities.
• Experience, competence and workload/level of support.
• Capacity of supervisor.
• Geographical location.
• Nature of/ease of access to other support/tools/standardised processes.

Ask yourself the who, what, where, when and how questions–

Who will supervise and be supervised (remember it’s not just juniors who need supervising!); will you have different supervisors and line managers, and what will be their roles?

What work will be supervised – will it be everything the supervisee does, or will it be more limited? What will it entail?

Where – will it be face-to-face, remote, a mix? There is a section in the guidance on supervision in a hybrid and remote environment. Think about the importance of learning by osmosis, including the calls that junior fee earners could listen to if in the office that they won’t hear if you as a supervisor are working from home and similarly, the calls that a supervisor might overhear a more junior lawyer conducting that might suggest a difficult client with a potential complaint that a supervisor’s intervention might be able to nip in the bud.

When will the supervision take place? Will you have set times in the day/week/month, and how regular will it be? Will you have team meetings to discuss problem cases/queries?

How – how many people will the supervisor be responsible for, and at what level? How does this fit with capacity? How detailed a file review might it be? Does it involve reviews of the documents on the file as well as discussions and questioning of the supervisee? Is there a file note of the discussion?

The factors set out in the guidance and above will help you decide on the appropriate approach.

3. Conducting supervision

The guidance expects supervisors to communicate directly with each person they’re supervising often enough to make sure that the supervisor has clear oversight of the work being done, is readily available to support the person doing the work and can provide robust assurance that legal and regulatory requirements are being met. It also suggests that the supervisor should have some knowledge of each matter being progressed by the person being supervised and/or should monitor a meaningful sample of their work in addition to providing advice and guidance on specific matters (e.g. non-standard issues)

4. Ensuring supervision is effective

And probably most importantly, the SRA makes it clear that it’s not enough to just have arrangements in place

– they need to be effective.

Any firm can have a written policy (and it’s important that you do have one on supervision), but it’s what happens on the ground that is essential to ensuring compliance and minimising risk. Are your partners/supervisors doing what you say you do?

Many firms I’ve visited say they have a process of file reviews conducted by the partner in each department each month, but there is either no evidence of this taking place, or if there is such evidence, it will occasionally give an impression that it is just a tick-box exercise with very little thought or time devoted to it or, alternatively, they’ve chosen the smallest files (because they are quicker to do) rather than the more complicated/bulky ones.

The SRA also expects the firm to take proactive steps to ensure that it is working effectively. It doesn’t give much guidance on what that might involve, but depending on the size of your firm, I would suggest things like;

• having a system of internal audit (outsourcing to experts can be useful for this if you do not have the internal resource or you are unsure if it is being done well enough);
• getting feedback from employees through performance reviews and surveys;
• reviewing claims and complaints for any trends where supervision might be lacking;
• making sure that supervision is documented and you are evidencing learning from mistakes;
• training supervisors;
• sharing knowledge through round table team meetings or training sessions

The guidance has lots of good practice examples of what good supervision should look like and also covers specific areas of legal services which might be problematic, including litigation, claims management activity, immigration and legal aid work, so if you practice in these areas, take a careful look at it.

So finally – some further tips/takeaways

• Read the guidance note!
• Critically assess and discuss within your firms how well you do supervision. What does good supervision and quality control look like in your firm? Is everyone working to that standard? Here are some questions to ask as a “starter for ten” when considering this:
• Choose your supervisors and line managers carefully, and where they are different, share feedback – they don’t all have to be partners, so think about the strengths and weaknesses that people have and give them roles which they will do well.
• Are they approachable, available and 100% attentive?
• Open door policy – what does this actually mean in your firm? Every firm I speak to says they have it, but often when pressed or in our health check questionnaires sent to fee earners, the feedback is that it can be difficult to get access to their supervisor. How has this been adapted for remote working?
• Is there appropriate and supportive delegation? Are matter risk assessments carried out (not just for AML compliance!) to appropriately allocate the work based on capacity, skills, experience etc? Be alert to the instructions which at first look straightforward/process-driven/low margin work but can become more complex/time sensitive/a complaint risk etc.
• Are instructions clear as to what is expected, timescales and role responsibilities?
• Is there regular constructive feedback (both ways!) – good communication is essential, and remember that it is a two-way street, so supervisees also have a responsibility to speak up, ask for clarification and chase supervisors if a deadline is looming. And if you are reading this as a trainee/paralegal/junior solicitor, remember that partners were in your position once, and there is no such thing as a daft question!
• Is there careful checking of drafts/file reviews and approval requests?
• Record/evidence supervision – whether through time recording with a narrative or as a supervisory file note and by way of file reviews and internal auditing. Where you have internal auditors, be clear about what they are checking for – they might be able to check for compliance with policies and procedures/Lexcel requirements etc, but they may not be suitably qualified or experienced to check the quality of advice.
• What are the blockages preventing certain supervisors or the firm generally from providing effective supervision?
• Who is responsible for 121s and peer file reviews, and how do you make sure they are carried out?
• Are there any recognition/allowances given to those who have greater supervisory responsibilities?
• Do junior lawyers feel comfortable speaking up /admitting mistakes – how do you know?
• Is your training, both firmwide and within the practice areas, robust enough? Use the case study from Part 1 if you have a residential conveyancing team to test their understanding of ID fraud red flags. Use alternative disciplinary cases to raise awareness and understanding. Learn from the firm’s mistakes/claims by providing training on how they arose/near misses (anonymously, of course, to avoid embarrassment) and the cost to the firm.

Every firm will approach supervision differently, and no one way is better than another as long as there is clear evidence that it is taking place. We can expect further activity from the SRA in relation to this and competency requirements generally in the future, so be prepared now!

 

If you have any questions concerning the issues raised in this article, Paragon, Compli or the firm’s approach to risk management more generally, please get in touch using the details below

CONTACT US

For more information on the changing market, your firm’s PII renewal or to organise a meeting, please contact:

Ryan Senior

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T +44 (0)20 7280 8254

M +44 (0)7827 575 652

Piers Winton

E pwinton@paragonbrokers.com

T +44 (0)20 7280 8224

M +44 (0)7787 375378