Industry News

The Lexcel Standard V5

13 November 2011

Lexcel is the Law Society’s own recognised practice management standard. Practices accredited to the Lexcel standard have been independently assessed to demonstrate that they meet high standards of excellence in key areas of legal practice management.

The number of accredited practices has now passed the 1000 figure.

The demise of LSC audits has seen a rush toward more practices seeking Lexcel accreditation to prove that they are working to acceptable standards of supervision and risk management as an alternative to the SQM for legal aid contracts.  No bad thing.

With the introduction of Outcomes Focussed Regulation many more firms are seeking advice from Law Society Accredited Consultants to assist them in working toward the new standard.

The Lexcel Standard v5 published on 31 October 2011, rather later than originally intended, sees some movement around the sections to assist in clarification and avoidance of duplication.  Some new additions to sections introduce improvements which most firms will have been exercising already; especially those who have used forward thinking consultants who look beyond the standard.

The new standard does however leave out some previously essential sections, for instance Mortgage Fraud Policy, an essential for conveyancers. This is now left to the separate CQS, which is effectively ‘Lexcel Lite’ just for practices with a conveyancing department.  Possibly this is a tool for lenders to use for or against a firm?  Time will tell.

However is it more devious than that?  The Lexcel Standard v5 omits AML Regulations presumably to assist in the Lexcel Standard v5 being acclaimed and used as an international standard. Good money for the Law Society, but no protection for its English and Welsh members.

The assumption in the Lexcel Standard v5 is that an English or Welsh practice will be automatically complying with the SRA Code of Conduct 2011.  For instance there is no requirement for reference to a COLP or COFA the Lexcel Standard v5. Is this wise? It leaves English and Welsh firms wide open to criminal sanction and/or regulatory penalty if they mistakenly believe that the Lexcel Standard v5 compliance equals regulatory and legal compliance. It does not.

The get out for the Lexcel Standard v5 is that: ‘Most organisations will document all procedures within an office manual, but there is no reason why they should not be set out in a number of different sources.’

Surely an ‘Office Procedures Manual’ should contain all ‘procedures’ or staff will become confused as to where to look even with reasonable cross-referencing; or worse, when time is pressing, make an assumption that there is not a procedure to follow?

How will this impact on recognizing a problem to bring to the notice of the practice’s COLP or COFA, especially where self-reporting may be required?

A Lexcel consultant will therefore need to be an expert in the SRA Code of Conduct 2011 as well as the Lexcel Standard v5 to ensure that ‘best practice’ is followed.  This is an impossible task. Will individuals and consultancies purporting to have all those skills really have them?  Consultancy web-sites will need to be scoured to ascertain that all the necessary skills are available.

How about assistance from the SRA with the SRA Code of Conduct 2011 elements not noted in the Lexcel Standard v5? PSU? Closed down just when it is probably most needed. The cynic may see this as a way of moving to intervening quickly in a number of smaller firms who will spend time actually fee earning instead of spending hours as both COLP and COFA in non profitable time.

Both the SRA Code of Conduct 2011 and the Lexcel Standard v5 require an understanding of management and management procedures. Few lawyers are equipped to be both a manager and fee earner.  Larger firms have the benefit of a dedicated
manager or managers; smaller ones will have to rely more and more heavily on outside assistance from consultants.

The art will be to select a consultancy that can advise on both the SRA Code of Conduct 2011 and the Lexcel Standard v5 and keep a practice up to date as further developments occur.

Ian Braithwaite
Client Relationship Manager

T: 0845 056 3949
M: 0743 727 4046

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