In Spring 2023 the Solicitors Regulation Authority (SRA) introduced new rules and fresh guidance [1] to help law firms maintain a positive workplace culture in response to complaints it received that some law firms have an unsupportive, bullying, or toxic working environment.
The changes to the rules followed the SRA’s thematic review which took place during late 2021 exploring workplace culture within law firms (Thematic Review). The report published in February 2022 highlighted concerns around long working hours, client pressures and capacity, targets and worries regarding the reporting of mental health issues and instances of bullying. [2]
One year on since the new changes around wellbeing and mental health, this article explores the topic of workplace culture and what measures law firms should have in place to create and maintain a positive workplace culture.
Paragraph 1.5 of the SRA Code of Conduct for Solicitors, Registered European Lawyers and Registered Foreign Lawyers provides that individuals must treat colleagues fairly, respectfully and they also must not bully or harass colleagues or discriminate unfairly against them. [3] Furthermore, managers (such as partners and directors) must challenge any such behaviour that does not meet those standards.
The rules also apply to law firms and paragraph 1.6 of the Code of Conduct for Firms [4], provides that law firms (its partners or directors and those responsible for compliance) must treat their employees fairly and with respect. They must not bully or harass them or discriminate unfairly against them. Law firms have a duty to ensure that their employees also meet the same standards.
The SRA does not expect those it regulates to create or sustain working environments which risk:
Law firms must maintain public confidence in the integrity of the profession and in the legal workplace as a safe and inclusive environment.
The term ‘colleague’ in respect of the new rules not only refers to formal employees of the law firm in which a solicitor works but also includes individuals who may be instructed by the firm such as barristers, experts and consultants.
Since the pandemic changes to working practices have allowed flexibility so the place of work is no longer confined to the traditional physical office but also the virtual workplace. Conduct at workplace events may also be caught by the rules if it “touches realistically upon the practice of the profession, in a way that is demonstrably relevant”.
A year on and the SRA’s Regulatory Management Team are engaging with a number of firms exploring what they have done or propose to do to create a positive workplace culture. As part of this engagement exercise it is likely that the SRA will expect to see a little more than a written policy and the provision of some training, despite stating that they will not prescribe what working practices or procedures they expect law firms and employees to adopt.
It is important that law firms recognise the importance of taking steps towards creating or maintaining a positive workplace culture, as the SRA will take action against those who they believe have breached their regulatory obligations. At the very least firms should have effective systems and controls in place which:
Creating and maintaining a positive workplace culture is key to the success of any organisation. People who work in such businesses tend to flourish and be happier, healthier, and more productive.
Law firms that invest in creating and maintaining a positive workplace culture and prioritising employee wellbeing will benefit as people and clients will be less likely to leave if they are happy. It also helps attract new talent and clients to the firm.
In addition, firms may see a reduction in complaints as client relationships are strengthened, and claims may also reduce as less mistakes are being made, or if something does go wrong employees feel more comfortable to raise concerns and admit any mistakes. With the biggest professional indemnity insurance renewal period fast approaching, it will make the process easier as insurers are increasingly asking questions of their insureds about how they deal with supervision and maintain a positive workplace culture.
Given the mandatory nature of Professional Indemnity Insurance (PII) for legal services firms, understanding how to secure optimal coverage is essential. Our dedicated team can guide your firm in choosing suitable PII coverage and offer robust risk management support.
