Ethics in a Pandemic

Troubling accounts have been emerging of law firms failing to approach some of the issues in a way that is professionally and, perhaps morally, acceptable.

According to a former chair of the Law Society’s Junior Law Division, for example, an individual due to start her training contract at a law firm has been informed, only via email, that her training contract offer was being withdrawn.

Elsewhere, staff are reportedly being furloughed and firms telling those staff to ask government directly for help in paying their salaries. But under the emergency measures (the Coronavirus Job Retention Scheme), it is for firms and not their furloughed staff who are to make a claim for 80 per cent of employees' wages from government.

At the start of the full UK lockdown, there were also accounts of firms who were refusing to allow their employees to work remotely - until staff made clear their objections, and were preparing to risk dismissal rather than risk their health by continuing going into the office to work.

It seems some firms, though undoubtedly a minority, are either forgetting their regulatory obligations or have been in ‘panic mode’. Most law firm leaders are doing a great job from the outset in adapting to a new ‘normal’ and protecting the interests of their staff and clients at the same time.

Regulatory requirements

While it’s far from ‘business as usual’ for law firms, it seems to be business as usual for the Solicitors Regulation Authority (SRA), which promptly issued guidance early on the crisis stressing that those firms who do not comply with their regulatory obligations in their crisis response could risk formal complaints.

Firms must, said the SRA, “do everything they reasonably can to comply with our rules, and follow our Principles. This includes serving the best interests of their clients and upholding the rule of law”.

Remember that, in particular, Principle 2 requires solicitors to act in a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons; and Principle 5 requires them to act with integrity.

The regulator also stated that it expects firms to have “appropriate contingency plans in place for disruption”. But not all will have done so. The SRA also acknowledged that we are now working and practising in exceptional circumstances and the coming months could present particularly challenging issues. With that in mind, the SRA assured the profession that it will take a “proportionate approach” to compliance and enforcement.

Where the SRA does receive complaints, it reassures solicitors that it would take into account mitigating circumstances, including focusing on serious misconduct, “and clearly distinguishing between people who are trying to do the right thing, and those who are not”.

It also recommends that firms and solicitors who face compliance problems because of the pandemic, the approach you take should be clearly documented. Each firm’s COLP will be bearing a particularly heavy burden in these strange times.

Unfortunately, a number of firms could well be penalised by the regulator for their failure to have an effective business continuity plan in place. They are vital to protect the risk of loss of revenues, protect jobs and minimise the risk of prolonged disruption, which is why it’s so vital to have one in place.

Lexcel requires firms to have a business continuity plan that includes, for instance, an evaluation of potential risks that could cause business interruption, ways to mitigate or avoid the risks, key people relevant to the plan’s implementation and a procedure to test the plan annually.

Small law firms may have previously taken a view that they did not need such a plan, but they are more likely to risk significant problems without one. The Law Society suggests that such firms could develop a business continuity plan identifying their critical staff and do a skills audit; ensure that IT and communications systems are robust enough and can facilitate remote working with enough equipment is available; and covering other issues including finance processes and communications.

Meanwhile, the Law Society has called for the government, the banks and regulators to ensure smaller and mid-sized firms can access emergency support during the pandemic amid concerns that individual lender requirements may prevent firms from accessing these loans. The MoJ has also clarified that legal aid firms will qualify for the job retention scheme.

A further issue firms should not ignore is the fact that their reputation is at stake in this crisis. Mishandle your staff and your clients, and the reputational fallout could be significant and long lasting.

The last few weeks have demonstrated that no assumptions can be made about the future. Crises can hit with little notice – and as one solicitor recently commented on Twitter, she remembers reviewing a firm’s ‘pandemic policy’ a couple of years and thought to herself at the time: “When are we ever going to need that?!”

Nick Brook and Caroline Poynton wrote in a 2012 report, Business Continuity Planning and Management for Law Firms: “Business continuity is about planning for the unexpected, including events that cannot necessarily be controlled or sometimes even anticipated. Terrorism has always been seen as a threat, however, in relation to law firms this has been indirect, as it affects those centres where law firms are based rather than targeting the firms themselves.
“And severe acute respiratory syndrome (SARS) and pandemics, once in the top three of threats, seem like a distant memory.”

Law firms who successfully weather the storm will have many lessons to learn but will undoubtedly be stronger for it. Solicitors who have been considering setting up their own firms are more likely to put a business continuity plan near the top of the agenda. And firms who emerge from the crisis, but took a particular battering because they had an ineffective plan to manage the risks of a global pandemic, will be licking their wounds. But hopefully, they will be considering how best to protect their firm in the event of a further pandemic.


Posted on 21.04.20