The New Lexcel V5 Standard
Lexcel Version 5.0 - The Latest Consultation - You heard it here first...
With the launch date of October 2011 for the new Lexcel Standard, the Lexcel Office has just released a consultation document outlining the differences and additions to the standard. Surprisingly there are no major additions, but some glaring omissions and some points that need clarification as outlined in the following points;
Removal of 1.3 Quality Policy from the standard.
Perhaps one of the more surprising omissions is the requirement for a practice to have a Quality Policy has been removed, which up until now has been the focal point for the standard. After all, it is called the Law Society "Quality" Standard. It appears from the draft that his has not been replaced.
Equality and Diversity Policy Upgrade
The new standard has a slightly upgraded version of this policy, however it is not as stringent as the Equality and Diversity Policy implemented by the Legal Services Commission in 2010, which we found surprising as Lexcel is now allowable as an alternative to the LSC Specialist Quality Mark
New Policy on Outsourcing
The new standard now has a mandatory policy regarding outsourcing of work, including details of all outsourced activities, procedures to check the quality of outsourced work, and the steps that outsourcing providers have taken to ensure that information will be protected. There will be clarity needed on just what is classed as "Outsourcing," for example, are archiving service providers classed as outsourcing service providers?
Community and Social Responsibility Policy now mandatory
This policy had been an optional addition in previous versions, the new standard does not provide enough definition for what this policy should look like. This was a weakness with the previous standards when the policy was optional.
Money Laundering and Mortgage Fraud Downgrades
Another surprise with the new standard is how these two previously key policies and procedures have been downgraded so much that the only feature seemingly left is a requirement to check the identity of clients.
COLP & COFA Omissions
The much heralded new roles of Compliance Officer for Legal Practice and Compliance Officer for Finance and Administration have been excluded from the consultation standard. The notes that accompany the consultation state that these roles are a "SRA regulatory specific requirement which practices should automatically be compliant with, as such it has not been included in V5." We find this a really odd statement to make, as if that were the case a large proportion of the current and future Lexcel standard would not be included, such as Client Care Rule 2(current) compliance.
Referrals and Commissions included for the first time
7.8 of the new V5 standard states "Practices will have a procedure for referring clients to third parties." This has never been included in the standard before even though it is a requirement of the SRA. There is also a requirement at 7.5b to advise the client where the practice will receive a financial benefit as a result of accepting instructions, another first.
Upgraded Conflicts Of Interest Policy
6.8 of the new standard deals with conflicts, which have been upgraded to a policy and include a requirement for definitions of conflict by work type and includes training for staff on their definition.
New WIP And Debt Processes
Also for the first time the standard includes a procedure to monitor work in progress values and a procedure to manage debts that are unlikely to be recovered.
Apart from these points, the other changes in the standard appear minor.
Our overall impression is that the standard has not really had an extensive review against the new Outcomes Focussed Regulation to be introduced from October onwards and does little to ensure that practices with the standard will meet he provisions of OFR extensively.