HoLP and HoFA criteria for Key Personnel

The HoLP
A HoLP applicant must at a minimum be an individual who is an Authorised Person (qualified lawyer) that holds a current and valid practice licence issued by regulator in England and Wales, who meets the CLC’s fit and proper person requirements.

Occupational experience and legal knowledge:
A HoLP applicant should be able to demonstrate through their previous employment responsibilities (CV or verification from a current or past employer) or educational attainment that they have the threshold level of experience or theoretical knowledge of managing compliance elements to support their application to become HoLP.

A prospective HoLP should demonstrate an understanding that when the practice ceases to have a HoLP, there is risk to the provision of the legal services, and that they are the accountable individual that must inform CLC, and confirm that arrangements are in place to source an appropriately skilled and qualified replacement within 28 days (or longer by agreements with the CLC); or trigger regulatory action i.e. a managed closure.

The individual seeking to be authorised as the HoLP should be able to demonstrate that they have previously held a position in which they have been accountable for, including but not limited to, the following types of functions:
a.    implementing, monitoring, or reviewing  compliance processes and systems; such as GDPR, AML, practice wide polices, such as vulnerable clients, and understanding practice and matter level risk assessments;
b.    supervising legal transactions/matters carried out by others to ensure that they are compliant with the appropriate regulators arrangements. The CLC the regulatory arrangements;
c.    keeping a record of compliance breaches;
d.    preventing and dealing with conflicts of interests and improper influence;
e.    managing a practice’s complaints-handling procedures;
f.    acting as a formal point of contact for compliance in the practice to the appropriate regulator; and
g.    supervising business continuity planning to ensure in the event of an adverse situation the continuity of legal service provision.

The HoFA

A HoFA applicant should be able to demonstrate through their previous employment responsibilities (CV or verification from a current or past employer) or educational attainment, that they have the threshold level of experience or theoretical knowledge of managing the compliance elements of the client account in order to support their application to become HoFA.

A HOFA should have the ability to or an understanding of how to extract various reports from the accounting system such as;

Client to office transfers, client to client transfers, matter listing with balances, cashbook and a reconciliation summary.

The Accounts Code requires reconciliations to completed at least once each calendar month and the requirements are detailed at paragraphs 13.9.1 – 12.12, see below:

13.9.1 prepare a bank reconciliation statement by comparing the balance on the client cash account with the balances shown on the client bank statements and passbooks (after allowing for all unpresented items) of all Client Accounts and Separate Designated Accounts and any Client Money held by you/the entity in cash;

13.9.2 as at the same date prepare a listing of all the balances shown by the client and office ledger accounts and compare the total of the client ledger credit balances with the balance on the client bank reconciliation statement; and

13.9.3 prepare a reconciliation statement showing the cause of the differences (if any) shown by each of the above comparisons.

13.10 The steps required under requirement 13.9 are:

13.10.1 prepared to a date not more than five weeks after the date to which they were last prepared; and

13.10.2 completed within 7 days of the date to which they are prepared.

13.11 Records maintained in accordance with requirements 13.1 to 13.9 are kept separate from those for any other business. Where the accounts of more than one business are maintained on the same system, they are capable of being reproduced independently by the system.

13.12 You have immediate and unrestricted access to the Accounting Records

Typical (threshold) experience would include at a minimum one of the following:

  1.  occupational experience (CV, or validation from a past employer) the ability to extract various reports from the accounting system such as; client to office transfers, client to client transfers, matter listing with balances, cashbook and a reconciliation summary; or
  •  a Pass on the CLC Unit Managing Client and Office Accounts; or
    •    a Pass on SRA Solicitors Accounts Unit (Level 6).

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