The SRA regulatory framework for in-house legal teams

In-house legal practice has been the subject of increasing focus over the last year, with two key developments:

• The widely publicised scrutiny of the role of in-house and external lawyers in criminal prosecutions relating to the Post Office Horizon system, which is the subject of an ongoing public inquiry;
• The Solicitors Regulation Authority (SRA) carrying out a thematic review and publishing draft guidance to in-house solicitors on their regulatory obligations.   

In addition, the financial pressure on local authorities have caused speculation as to whether they should continue to fund practising certificates for employed solicitors.   

SRA Thematic Review

The 2023 SRA in-house solicitors thematic review focussed on whether in-house solicitors were adequately protected in several areas:

• Safeguarding independence
• Managing risks with policies and controls
• Managing pressures and meeting regulatory obligations
• Maintaining continuing competence
• Ethical leadership and ethical risks

SRA Draft guidance

This was published for consultation in March 2024, and included:

• A summary of what can be expected of in-house solicitors by employers, and what solicitors should expect from employers
• Guidance on identifying your client
• Guidance on reporting concerns about wrongdoing
• Guidance on internal investigations

The SRA regulatory framework

The SRA Standards and Regulations apply equally to in-house solicitors and those practising in other settings including private practice.  The key elements are:

• The SRA Principles - which set out “fundamental tenets of ethical behaviour”
• The Code for individuals - imposing personal accountability for compliance, including personal reporting obligations and a requirement for solicitors to be accountable for legal services that they supervise
• Code for firms - imposing accountability for governance, systems and controls, but only where the employer organisation is itself regulated by the SRA.

Also relevant to in-house lawyers is the Authorisation of Individuals Regulations, which impose parameters on how in-house lawyers can practice. 

Practising Certificates

A Practising Certificate (or certification from one of a number of approved regulators) is needed in order to carrying our certain reserved legal activities, including, most importantly for in-house lawyers in local government:

• Conduct of litigation (including issuing, prosecuting or defending or ancillary functions)
• Exercising rights of audience.  

A practising certificate is also needed if a person is being held out as a practising solicitor. 

It’s also important to remember that if a lawyer does not hold a Practising Certificate, privilege in advice given may be affected.  

Duties to client

In-house solicitors have a general obligation to act in their client’s best interests, as is set out in the SRA Principles.  This is further developed in the Code for Solicitors:

• 3.1: Solicitors may only act on instructions from someone properly authorised on the client’s behalf: that may mean ensuring proper authorisation for a specific matter, by reference to schemes of delegation and other governance requirements
• 3.2: Work must be competent and timely
• 3.3: Solicitors must maintain competence and professional knowledge and skills
• 3.5: Solicitors must provide effective supervision
• 6.3: Solicitors must respect their clients’ confidentiality.

Client duties and the wider public interest

Responding to wrongdoing

The SRA’s draft guidance is clear that “All in-house solicitors should make sure that they understand how they report concerns in their organisation in advance of needing to do so”.  In-house solicitors “will need to alert [employer] when they believe the organisation is breaching or at risk of breaching its legal or regulatory obligations”.   

NDAs

The SRA has issued specific guidance on the limitations on how solicitors can facilitate non-disclosure agreements on behalf of clients.  

Duty to court

A solicitor’s duty to the court generally takes precedence over the duty owed to a client and is engaged in, for example, considering the extent of disclosure.  Courts – and the SRA – are particularly concerned to ensure that the duty is complied with in, for example, injunction applications.  

Maintaining competence

The SRA’s guidance to employers specifically provides that solicitors should have access to resources for ongoing ethical and professional development, either internally or by allowing access to external resources.  

Bevan Brittan’s team of regulatory specialists provides bespoke training and advice to Heads of Legal, monitoring officers and in-house legal teams, to support them in meeting their regulatory obligations.  Please feel free to contact us if it would be useful to discuss how we can support your team.