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Outsourcing - the new SRA Regulation and LEXCEL requirement

Who will this affect?

 The following people need to be aware of this new requirement: 

  • Solicitors especially the COLP
  • IT Support Companies who support Solicitors Firms
  • IT Software Companies who provide software to Solicitors Firms
  • Typing and Transcription service Companies who do outsourced digital dictation transcription for Solicitors
  • Scanning and Archiving Companies who scan and store solicitors files
  • Office Cleaning Companies who service Solicitors offices
  • Consultants who provide client related support to firms
  • Police Station Accredited Representatives

 This is not an exhaustive list but illustrates that many external  providers of services to Solicitors firms will be caught by this new regulation.

 The new SRA Regulation

 Outcome 4.1 requires that "solicitors keep the affairs of clients confidential unless disclosure is required or permitted by law or the client consents" to disclosure

 Firms therefore that outsource work and services need to take steps to ensure that the external organisation preserves client confidentiality.

 As a minimum firms must ensure that that there is an adequate confidentiality agreement in place with each provider.

 Indicative Behaviour 4.3 in the Solicitors SRA  Handbook states : "you only outsource services when you are satisfied that the provider has taken all appropriate steps to ensure that the clients' confidential information will be protected".

 The question for solicitors firms is -  How will you be so "satisfied"?

 The question for providers is - How will you satisfy the solicitors' firm?

 Solicitors will need to consider how they will "audit" the provider on confidentiality and the provider will need to think about the procedures it has in place e.g. non disclosure terms in their employees contracts, recruitment procedures, vetting of employees, equality & diversity policy.

 Consideration also has to be given to potential conflicts of interest if the external provider e.g. typist, has sight of opposing parties files with the risk of inadvertent disclosure.

Cpm21 is considering offering shortly,  a "Provider Audit" service to provide an independent  risk review of providers procedures and practices . Watch this space!

Solicitors do not have to comply with this requirement when they use counsel and external experts to assist in the provision of the "legal service".

 However, it is likely that use of external Police Station Accredited Reps will be caught by this regulation.