COLP & COFA Roles: How can locums assist?

Introduction – the basics

In England and Wales, all firms regulated by the Solicitors Regulation Authority (SRA) must appoint two key compliance officers: the Compliance Officer for Legal Practice (COLP) and the Compliance Officer for Finance and Administration (COFA). These roles became mandatory in 2013 in England & Wales. CLC firms have a similar role called HOLP and HOFA.

These roles were introduced to ‘strengthen regulatory compliance, improve risk management, and embed a culture of ethical behaviour across law firms’.

Overview of COLP and COFA Roles

Regulatory Requirement

Every SRA-authorised firm must have a designated COLP and COFA at all times – if a practice doesnt have either, it has to notify the SRA within 7 days. These roles cannot be formally outsourced, although firms may delegate practical compliance tasks to external consultants while retaining ultimate responsibility.

Distinction Between COLP and COFA

The COLP is primarily responsible for compliance with legal and regulatory obligations (excluding financial matters), while the COFA focuses specifically on financial compliance, particularly under the SRA Accounts Rules.

Despite this distinction, there is significant overlap. Both roles involve monitoring compliance systems, recording breaches, and reporting serious issues to the SRA. In SME firms, it is not uncommon for one individual to hold both roles, provided they have the necessary skills and capacity.

In most small firms the COLP/COFA tends to be the owner of the business.

Responsibilities of the COLP

Core Duties

The COLP’s responsibilities are set out in the SRA Code of Conduct for Firms. These include ensuring compliance with the firm’s authorisation conditions, ensuring that managers, employees, and owners comply with regulatory requirements, and preventing individuals within the firm from causing regulatory breaches. In practice, this means the COLP acts as the firm’s central compliance ‘bod’.

Risk Management and Compliance Systems

The COLP must ensure that appropriate systems and controls are in place to manage compliance risks. This includes developing policies and procedures, monitoring adherence to the SRA Principles, conducting internal audits and file reviews, and ensuring effective complaints handling processes. The role also involves ensuring compliance with SRA requirements, which can be time-consuming and tiresome for the unfortunate individual concerned!

Reporting Obligations

A critical aspect of the COLP role is reporting breaches. The COLP must record all compliance failures, assess whether breaches are material, and report material breaches promptly to the SRA.

Training and Culture

The COLP also plays a key role in promoting a culture of compliance by providing staff training, ensuring awareness of regulatory requirements, and encouraging ethical decision-making. In SMEs, where informal working practices are common, embedding a compliance culture can be particularly challenging but essential.

Responsibilities of the COFA

Financial Compliance

The COFA’s primary responsibility is ensuring compliance with the SRA Accounts Rules. This includes safeguarding client money, maintaining accurate financial records, and ensuring proper accounting systems are in place.

Monitoring and Controls

The COFA must implement and oversee financial controls such as client account reconciliations, separation of client and office funds, monitoring billing practices, and supervising financial reporting.

These controls are critical in preventing financial misconduct and protecting client funds.

Recording and Reporting Breaches

Similar to the COLP, the COFA must record all breaches of the Accounts Rules and report material breaches to the SRA. The COFA’s reporting duties are particularly significant given the SRA’s strict stance on client money handling.

Personal Liability

Both roles carry personal regulatory risk. Failure to comply with obligations can result in disciplinary action by the SRA.

This reinforces the seriousness of the roles and the need for proper support and training.

Eligibility Requirements

General Requirements

To be appointed as a COLP or COFA, an individual must be approved by the SRA, be fit and proper, consent to the designation, and not be disqualified from acting in the role.

They must also generally be a manager or employee of the firm.

COLP-Specific Requirements

The COLP must be an authorised person with the SRA, such as a solicitor, barrister, or legal executive. They must have sufficient seniority and authority within the firm, as well as strong knowledge of regulatory requirements.

COFA-Specific Requirements

The COFA must have appropriate financial management experience, understand the SRA Accounts Rules, and be capable of overseeing financial systems. Unlike the COLP, the COFA does not need to be a lawyer, but must have relevant financial expertise.

Suitability and Seniority

The SRA assesses candidates based on ‘character and integrity, competence and experience’, and their ability to safeguard compliance. In SMEs, this often means appointing senior individuals such as partners, practice managers, or finance directors.

Documentation and Reporting

A significant portion of the role involves documentation, including compliance manuals, risk registers, training records, and breach logs. These records are essential for demonstrating compliance to the SRA.

Use of External Support

Although the roles cannot be outsourced, firms often rely on external consultants to assist with audits, training, and policy development, particularly in SMEs where internal resources are limited.

Application Process

SRA Approval

Candidates must be approved by the SRA before taking up the role. Approval is obtained through the firm’s MySRA portal, where the regulator assesses eligibility, suitability, and consent. At the time of writing this, the SRA are seeming to take forever, and there is a lot of nit-picking going on as far as we can see on the applications we have been involved in.

Forms and Procedures

Different forms may be required depending on the firm’s circumstances, including standard applications for new appointments and emergency applications where a compliance officer is unexpectedly unavailable.

Emergency Approval

If a firm suddenly loses a compliance officer, it must notify the SRA within seven days and apply for temporary approval. This approval typically lasts 28 days while a full application is submitted.

Ongoing Obligations

Once approved, compliance officers must maintain their competence and continue to meet SRA requirements. Failure to do so may result in removal from the role.

Continuing Competence

The SRA expects compliance officers to maintain ongoing competence by keeping up to date with regulatory changes, participating in professional development, and regularly reviewing compliance systems.

Embedding Knowledge Within the Firm

Training is not limited to compliance officers themselves. They must also ensure that all staff understand their obligations, reinforcing a firm-wide culture of compliance.

How Can Locums Help with COLP/COFA Work?

Good question. We have placed locums to act as the COLP at firms in emergency situations, or in instances where a firm specifically has a full time COLP because of their size or nature of work and their existing COLP has gone off on maternity leave or similar.

As Jonathon Bray from JBL Compliance says: “the real value of an interim compliance resource is more than just fixing a short term problem. It is helping the firm stay in control, maintain oversight and avoid making a rushed appointment that creates a bigger issue later.”

How many hours a week must a COLP work?

We have heard 14 hours a week is the minimum when firms are being assessed by the SRA, but apparently the critical test is not “hours worked” but whether: “the firm’s compliance systems are effective and the COLP/COFA can properly monitor, record, and report breaches.”

Can I be a COLP/COFA for more than one firm?

Our understanding is that there is no rule preventing someone becoming COLP/COFA for more than one firm, but that the SRA look very closely at anyone applying to become a COLP/COFA and assess whether they will be able to pay sufficient attention to both practices.

Locum Advice

The key thing to bear in mind is that you need to know what you are doing, and to make sure you are fully up to date with regulatory requirements and compliance. After all, one key issue for anyone thinking about COLP/COFA work is that you can be held personally responsible for anything that goes pear shaped at the firm, and it can affect your ability to practice going forwards.

As such there is usually a premium placed on hourly rates where COLP duties are involved. For current rates we are seeing please visit our hourly rates page here. The responsibility you are taking on is immense, and you want to make sure that you are adequately compensated for the risk.

This page is intended solely as an overview for anyone contemplating taking a role with a firm that involves COLP/COFA responsibilities.

For advice and assistance with SRA compliance & regulatory work, please visit www.jblcompliance.com – Jon and Sam are both happy to help SME law firms with this somewhat tiring part of the business!

To register a COLP/COFA assignment with us, please click here.