Unsure of your duties after being designated as a COFA? These responsibilities indicate that you are a trustworthy person who can adhere to the SRA's standards. But what does it really mean to be a COFA? What are you expected to do in this new role?
As the ILFM our role is to ensure that you, as a COFA, become so familiar with your tasks and responsibilities that you’ll be able carry them out without a hitch, and to remind you that we are your first port of call with legal finance compliance issues.
We have seen in the past, that some smaller firms have appointed legal cashiers and practice managers as COFAs because they are the obvious choice in terms of their knowledge of the day-to-day transactions. Is this right for you or your legal firm? As we all know, legal cashiers are so integral to a legal finance function, but they might not be in a position to feel that they can be assertive when up against a senior partner. Will they have the passion, time or salary to enforce change?
What is a COFA?
It’s important that you understand exactly what this job role entails and how it will be implemented in your legal practice because of the responsibility surrounding it, including some serious consequences if the rules aren’t adhered to.
A COFA is a Compliance Officer for Finance and Administration, and the SRA (Solicitors Regulation Authority) mandates that all authorised practices appoint a COFA as well as a COLP. We know that some of you will be a COLP and a COFA, normally in 1 - 3 partnership level firms, or sole practitioners of course.
It’s common for a COFA to have a high position in the practice and to be perceived as reliable, we often see that COFAs are highly respected in their place of work especially as they will need to assert their authority when it comes to challenging problems. Our COFA Masterclass gives anyone who has taken on the role of a COFA that complete training and support.
Responsibilities of a COFA
As a COFA your responsibilities are broad and there are many that need to be fulfilled. Here are some of the most important ones that are critical to understand.
Ensure your firm complies with the SRA’s rules
How many times have your read in industry news about a solicitor who has ignored anti-money laundering responsibilities and been banned from holding compliance roles?
One of a COFA’s primary responsibilities will be to take all necessary steps to ensure that everyone in its firm follows the SRA's rules. To fulfil those responsibilities, they must have a thorough understanding of the SRA account rules. They were made much simpler a few years back, however our advice is never be complacent.
Taking steps to train and work with everyone in the company to be totally aware of the rules and how they affect their day-to-day duties is a massive task but one that can be done relatively easily. This is where the person with the COFA “badge” needs to have a sense of authority and respect in a firm, as they’ll need to be able to stand up for themselves.
It might seem a little intimidating when you first start out as a COFA, which is why having a go-to professional membership is important. The ILFM provides COFAs with a wealth of resources and services making the new role easier to understand and adhere to.
Ensure billing procedures are correct
Seems obvious, but make sure your billing process and procedures are on point.
Invoices are only made enforceable if they are:
“signed by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign, or enclosed in, or accompanied by, a letter which is signed…” (Solicitors Act 1974, as amended by the Legal Services Act 2007)”
If it is routine for the accounts staff to sign bills or letters, it would be advisable to make a record of their authority to do so. All about the evidence! Oh and do review your standard invoice wording you send out on every invoice.
Report any serious breach to the SRA
If your firm's account rules or terms & conditions have been seriously breached, you must notify the SRA as quickly and efficiently as possible. It’s up to you to decide what constitutes a significant enough breach to report. Some breaches require you to report them, while others require you to make that decision because unfortunately for you there are no clear parameters as to what is deemed as serious! This is where we’d say CALL US FIRST and run it by us to check.
Have a feeling that a client account has been used as a banking facility? CALL US. Got wind that your Senior Partner has been asked by a well-paying client to act as an Escrow? CALL US!
If you are a COFA and have discovered a compliance breach, please do contact us before you contact the SRA as we can go through that issue in confidence and confirm if you need to report it to the SRA. It’s part of being an ILFM member, we are here to support, guide and explain issues surrounding the Rules.
Take all reasonable steps to record all failures to comply
It’s always a good idea to create a system that you can keep up with, where you can record all failures to comply with the account rules. Evidence! All reasonable steps must be taken to make sure that everything is recorded, even if it is just a “small” breach. Again, deciding what is a small breach versus a strike off might need a chat with us first.
“If a law firm has no breaches in its register during an accounting period, I’d question if the reporting processes are working effectively”
To keep up, your system can be customised based on what you know will work and what you are comfortable with. The system you create should make it easier to detect and report security flaws, making your role easier to track.
Report the practice if it is in serious financial difficulty
Rule 3.6 of the Code of Conduct for Firms requires prompt notification of “any indicators of serious financial difficulty”.
Being a COFA means that you should have access to all the financial information that the practice has. Meaning that you will be able to stay up to date on any financial difficulty the firm might be in. If this situation ever arises, it should be reported to the SRA. Not only does financial trouble impact the firm, it also affects the safety of clients’ monies that the firm holds.
The COFA position is not one to be taken lightly. Those who accept the role should have the resources, time and support needed to do the job properly and effectively. It is such an important, yet potentially risky role, so we’d always recommend seeking our advice through cost effective ILFM membership when you need it.
If you are new to your COFA role and would like a quick chat, we can advise you on how we can help with independent advice, support, together with resources accommodating you in this heavily compliant role. We try to help anyone in this industry who needs it, and we are committed to assisting in order for you to achieve your goals and succeed in your new COFA role.
We have a COFA Masterclass - The role & responsibilities of the COFA on Tuesday 28trh Sept 2021, 10-1pm - see below for more info and other dates.
COFA Masterclass - The role & responsibilities of the COFA
(3 Hours CPD) From just £150
"I would highly recommend the ILFM interactive introductory online sessions. They are fantastic and really get you thinking about your every duties and responsibilities from new angles for your personal and teams development" Kieran Egan, Practice Manager Adkirk Law.
The role and duties of the COFA, implementing systems to protect client money and breach management and reporting. It will also cover COFA tips and provide a hitlist of key tasks.
The training will include practical examples and case studies discussing whether a breach is serious and COFA conundrums.
Whether you are being appointed as a COFA, a member of an accounts team or supporting the COFA in their role you will find this training invaluable.
A deeper understanding of the role along with useful tips, interactive discussions about challenges the COFA faces and approaches in managing the role. An insight into what best practice looks like and also what can go wrong within a firm and the warning signs which could indicate potential problems.
- Background and responsibilities of the COFA role
- Protecting client money
- Breach reporting and management
- COFA conundrum and scenarios
- COFA Tips and hit list
Speaker/Trainer: Richard Hill - view Test Your Knowledge