Fraud awareness

Whenever there are pressures on a business, and solicitors’ practices are no exception, there are opportunities for fraud for those who are unprepared or unaware. Fraud within a legal practice can arise from three directions:
l  staff working operating without proper supervision or control;
l fee earners and partners working under duress; and
l clients who take advantage.

Clever fraudsters can be adept at covering their tracks. To counter this the Law Society, by continuing to improve the Solicitors’ Accounts Rules (SAR) controls covering good practice requirements for the proper control of client money endeavours to give quality guidance which, when followed, actively discourages fraudulent activity.

This certainly reduces the likelihood of internal fraud of both fee earners and other staff but it is important that principals and owners monitor the controls and ensure compliance is reviewed on a regular basis, either by the practice manager, a suitably qualified individual or external reporting accountants. There is no excuse for negligence when, or if, a firm does not regularly control the client