New Guidance for in-house solicitors

The guidance has been released in draft form and the SRA are currently welcoming feedback from the community of in-house solicitors. Although the guidance largely focuses on ensuring that employers understand the regulatory duties and standards that solicitors must comply with, it also includes some practical suggestions which in-house solicitors could implement to ensure that they comply with their own professional obligations and act appropriately when identifying potential risks.

When working for a company that is not regulated by the SRA, the client is likely to be the employer (as named in their contract of employment) and the instructions usually will come from the governing body who make senior level decisions regarding the company. However, it is important to consider whether this remains true for each piece of advice that is being given, especially in situations where a solicitor may be asked to advise someone other than the named employer, or where a company has a complex structure.

The SRA have suggested in-house solicitors take the following precautions when receiving new instructions:

• Identify the client: when receiving an instruction, the solicitor should consider whether the person giving the instructions has the delegated authority to handle the matter and whether it is under their own employment contract to offer the advice.
• “Who is my client” policy: in-house legal teams should consider putting a policy in place that details the bodies they are able to advise, who has authority to provide instructions and who to speak to if there are concerns or if the position is unclear.
• Conflict of interest: if they are acting on behalf of a separate entity, the risk of conflict needs to be considered.
• Confidentiality: it should be made clear whether certain work is to be kept confidential between separate teams in the organisation.

Although the guidance offers some ideas on how to prevent risk, there will always be times where legal and/or regulatory risks arise and it remains the solicitor’s responsibility to raise or report concerns. The SRA recommend that in-house solicitors keep written records of any potential wrongdoing by the organisation or individuals within it, as this will be helpful if questions are raised in the future as to whether their regulatory obligations were met.

This is especially important as there may well be situations where wrongdoing persists within an organisation after it has been reported internally. In-house solicitors need to carefully consider whether they are breaching their obligations by continuing to work at the company and decide whether they need to escalate this externally. This obligation to report serious issues externally will continue even if they judge that they can no longer work for the organisation.

The key takeaway from this guidance is that although risk is inevitable, there are ways in which employers can work alongside their in-house solicitors to reduce this. This support from the SRA to in-house solicitors is welcome and it is hoped that the practical suggestions within the guidance will help to streamline the working relationship.

In-house solicitors have until 19 April 2024, to provide their feedback to the SRA before the guidance is published in its final form.

You can read the guidance in full here.

If you have any questions as a result of this article, need any assistance with establishing suitable in-house policies or have any regulatory concerns please contact [email protected]