Are your accounting processes ready to comply from day one?
Given recent high-profile cases, the Solicitors Regulation Authority (SRA) is rethinking how it safeguards clients of law firms.
Following a public consultation, the SRA has confirmed a major overhaul of the Accounts Rules 2019, due to land in early 2027.
If you run a law firm, the sensible move is to understand what's coming and start preparing now, not once the rules are finalised.
An annual Accountant's Report becomes the norm
Most firms, including many that are currently exempt, will need to file one every year, alongside a declaration setting out how client money is held and managed.
A six-month deadline, with real penalties
Reports must be filed within six months of your financial year-end, and missing that date brings a financial penalty.
Exemptions exist, but the detail isn't settled
Some smaller or lower-risk firms may qualify, though the SRA hasn't yet confirmed exactly what firms will need to prove.
Compliance officers gain more independence
In higher-risk firms, whoever holds a significant decision-making role can no longer also act as compliance officer for legal practice, finance and administration.
That threshold currently sits at £600,000 turnover or £2 million of client money held and the SRA has signalled it could widen.
Smaller firms that have never needed an Accountant's Report before face the steepest learning curve.
If your average client balance sits at £10,000 or less or your peak balance stays under £250,000 across the accounting period, you're likely in this group and will file one for the first time from 2027.
Larger firms have a different challenge, as they will need to separate the compliance officer role from senior decision making can mean recruiting or training someone new and that may take time to get right.
Our legal sector team is working with firms of every size to make the transition straightforward.
The rules aren’t finalised yet, but the direction of travel for the SRA rules is clear.
Firms that start preparing now will find the transition far less stressful than those that wait.
Ready to take the next step in your financial journey?
Contact us today to find out how FFT can support you. Whether you need help with your personal finances or business accounting, our friendly and open-minded team is here to assist you.
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