In March 2023, the SRA published its “in-house solicitors thematic review” following a comprehensive survey involving over 1,200 in-house solicitors. The SRA undertook a series of interviews with in-house solicitors working in both private and public sector organisations and met with key stakeholders in this sector. According to the SRA, as of 2023, in the region of 34,500 in-house solicitors are employed in England and Wales, representing a wide range of private industry sectors and public bodies. This includes multinationals, government departments, high-street businesses, charitable organisations, schools and universities, and local health authorities. They also affirm the essential role played by in-house solicitors within organisations; “This important, influential, and diverse part of the profession plays a key role in helping organisations to behave legally, fairly and ethically”. In this article, we will summarise why the review was carried out and the key findings.
Why Did The SRA Carry Out This Review?
The SRA initiated the review to improve their understanding of the role of in-house solicitors in England and Wales within organisations and:
- How they support an ethical culture
- The challenges they face in meeting their professional obligations, and
- How the SRA can help support in-house solicitors
As the SRA acknowledge, “without adequate safeguards and systems, in-house teams may struggle to manage conflicting duties and ethical and regulatory risks”.
What Were The SRA’s Findings In The In-House Solicitors Thematic Review?
The findings of the review focus on a number of key areas, including:
- Safeguarding independence
- Managing risks
- Managing pressures and meeting regulatory obligations
- Maintaining continuing competence, and
- Ethical leadership and ethical risks
Safeguarding Independence
The report found that, overall, in-house solicitors are well placed to withstand pressures that could negatively impact on their ability to provide impartial and objective legal advice. The SRA did find, however, that more can be done by organisations to help in-house solicitors put in place more support and controls to ensure their independence. The risk of not doing so is that in-house solicitors may face undue internal pressure and lose their legal objectivity. As the report explains, “5% of respondents had been pressured into suppressing information that conflicted with their regulatory obligations”. Steps that some in-house leaders are already taking include putting in place the following:
- Direct reporting lines and access to the board and Chief Executive Officer (CEO)
- Whistleblowing procedures and organisational speak-up policies
- Hybrid organisational structures whereby solicitors have a central team, and some are allocated to work within project teams for the duration of a project
- Measures to ensure financial independence – i.e. ensuring that remuneration does not compromise independence, and
- Mechanisms to allow in-house solicitors to seek support from external advisers where needed – as one private sector General Counsel told the SRA, “Sometimes I need to get a different view as being the GC of large team can be lonely. I need to discuss things with an external firm who might be more objective”.
Managing Risks
The SRA’s report found widespread weaknesses in the way that in-house solicitors manage risk. Specifically, the report stated, “Our review found many in-house teams did not have dedicated policies and controls to record and report legal risks, manage conflicts and confidentiality or instructions. In several cases, there was also an over reliance on ‘common practice’ to manage regulatory issues”. Two-thirds of respondents found that managing workloads was their biggest challenge.
Managing Pressures And Meeting Regulatory Obligations
70% of in-house solicitors surveyed reported that demands from colleagues represent the biggest pressure they face. The majority did say, however, they felt confident in their ability to act ethically in the face of considerable internal pressure. 10% of respondents reported that their regulatory obligations had been compromised in trying to meet organisational priorities. The SRA highlight the importance of putting in place proper controls to prevent internal pressure and protect the ethical stance of in-house solicitors.
Maintaining Continuing Competence
10% of respondents reported that they were not given sufficient time to keep up with their ongoing competence requirements. The SRA also found that:
- Some senior leaders did not reflect on their own learning needs and regulatory obligations appropriately.
- Most junior solicitors self-managed their training, and 25% had not received training on professionalism, ethics, or judgment within the past 12 months.
The report provides a reminder that all in-house solicitors must have the necessary opportunity and time to reflect on their continuing competence needs.
Ethical Leadership And Ethical Risks
And finally, the SRA found that identifying ethical risks and regulatory challenges may be more challenging for in-house solicitors when they face pressure and “without suitable infrastructure” that places ethics “firmly on the agenda”. Concerningly, the SRA found that some senior leaders didn’t see ethics as important or did not take the opportunity to discuss such risks with the legal teams. That said, the SRA did find examples of in-house solicitors who have used their influence to champion “ethically, socially, and environmentally supportive initiatives” within their organisations. In addition, central to this ethical leadership approach was a strong sense of responsibility “as the ethical conscience of their organisation”.
Final Words
The SRA’s review offers some positive insights and important areas for improvement for in-house legal practice. They have also provided recommendations next steps, sources for practical help and guidance, and checklists that in-house teams and their organisations can use to better safeguard independence, manage risks, manage pressures, maintain continuing competence, and ensure ethical leadership.
We have been helping solicitors and other legal professionals with disciplinary and regulatory advice for 25 years. If you have any questions relating to an SRA investigation or an SDT appearance, please call us on 0151 909 2380 or complete our Free Online Enquiry.