The CQS Core Practice Management Standards

1. The CQSCore Practice Management Standards CQS Supporter

2. Introduction The CQS Core Practice Management Standards Welcome to this online training course by Peter Rodd and Andrew Baker. This online course will take approximately 1 hour to complete.

3. Introduction Click each image to learn more.

4. Introduction Click each image to learn more. Peter Rodd joined Boys & Maughan in 1976, was admitted as a solicitor in 1978 and became a partner in 1981. He was appointed a Public Notary in 1989 and is a member of the firm's senior management team. He is past president and, for the last ten years, secretary of the Isle of Thanet Law Society. He is Chairman of the Law Society Property Section and a former member of the Council Membership Committee. He sits on both the Law Society Money Laundering and E-Conveyancing Task Forces, and is also past member of the Law Society Home Information Pack Task Force. Peter's specialisms lie in commercial and residential property, where he has more than thirty years’ experience handling a wide spectrum of both sales and purchases of properties.

5. Introduction Click each image to learn more. Andrew Baker joined Boys & Maughan in 1993, qualified as a solicitor in 1995 and became a partner in 1998. He is a member of the firm's senior management team. He has been in charge of quality standards at Boys and Maughan since 2000, seeing through three Investors in People assessments and preparing the firm for its successful Lexcel assessment in 2008. Andrew has worked with Peter in developing the CQS Core Practice Management Standards.

6. About CQS Core Practice Management Standards CQS Core Practice Management Standards require practices to have processes and procedures in place to reduce risks and to ensure a high standard of work. They have been developed from the Law Society’s Lexcel Practice Management Standard but are not as wide ranging as Lexcel. CQS Core Practice Management Standards are conveyancing specific. In some areas the Core Practice Management Standards specify a standard which may be higher than Lexcel, for example anti-money laundering and mortgage fraud. Practices with Lexcel are exempt from proving they meet CQS Core Practice Management Standards.

7. Learning Outcomes This online training course and assessment has been designed to train conveyancers on the Core Practice Management Standards of the Conveyancing Quality Scheme. The course includes an introduction to the Core Practice Management Standards, an overview of each of its key elements and fifteen multiple-choice self-assessment questions to test your understanding. After you complete this course, you’ll have an understanding of: • the purpose of the Core Practice Management Standards; • the processes that practices are required to have in place relating to: – risk management; – financial management; – supervision and operational risk management; – client care; – file and case management. This course (including the assessment questions and answers) has been approved as meeting the training requirements of the CQS.

8. Areas Covered by the Standards The CQS Core Practice Management Standards are divided into 5 categories: 1. Risk management. 2. Financial management. 3. Supervision and operational risk management. 4. Client care. 5. File and case management. We’ll learn more about each category in the sections that follow.

9. Section 1:Risk Management

10. Risk Management There must be a policy in place to cover the management of risk in the practice. This must specify the person responsible for the policy and a procedure for reviewing the policy annually to verify it is working across the practice. Risk management is divided up into three separate areas of risk: • Strategic risk; • Operational risk; • Regulatory risk. We’ll take a closer look at each risk area in the following screens.

11. Question Which of the following do you think are true? (a) A policy is required to show that firms have considered each area of risk independently. (b) A person within the practice must be appointed to be responsible for these risks. (c) The risk management policy must be reviewed annually to verify it is in effective operation across the practice. (d) Areas of risk will vary from practice to practice – you do not need to consider an area of risk if you do not think it is relevant to your practice. Think about your answer, then click submit to continue. Submit

12. Question Which of the following do you think are true? (a) A policy is required to show that firms have considered each area of risk independently. (b) A person within the practice must be appointed to be responsible for these risks. (c) The risk management policy must be reviewed annually to verify it is in effective operation across the practice. (d) Areas of risk will vary from practice to practice – you do not need to consider an area of risk if you do not think it is relevant to your practice. The correct answers are highlighted in green.

13. Strategic Risks Strategic risks are risks that affect the viability of the business. They are risks that something could change which could affect the continuity of the business. Click each dice to learn more: A SWOT analysis and a business plan and regular reviews of that plan will assist in reducing these risks.

14. Strategic Risks Strategic risks are risks that affect the viability of the business. They are risks that something could change which could affect the continuity of the business. Click each dice to learn more. Over-reliance on one source of work. A SWOT analysis and a business plan and regular reviews of that plan will assist in reducing these risks.

15. Strategic Risks Strategic risks are risks that affect the viability of the business. They are risks that something could change which could affect the continuity of the business. Click each dice to learn more. A change in the conveyancing market, or increased competition from ABSs. A SWOT analysis and a business plan and regular reviews of that plan will assist in reducing these risks.

16. Strategic Risks Strategic risks are risks that affect the viability of the business. They are risks that something could change which could affect the continuity of the business. Click each dice to learn more. Financial issues. A SWOT analysis and a business plan and regular reviews of that plan will assist in reducing these risks.

17. Operational Risks Operational risks arise out of the nature of work that the firm does. Many operational risks will be reduced by having in place the processes and procedures required by the Core PMS, for example: • Supervision • File reviews • Client care procedures

18. Regulatory Risks Regulatory risks arise out of the regulatory framework in which we practice. See for example the SRA requirements – Code of Conduct or Data protection legislation. Click each box to reveal how you can manage these risks.

19. Regulatory Risks Regulatory risks arise out of the regulatory framework in which we practice. See for example the SRA requirements – Code of Conduct or Data protection legislation. Click each box to reveal how you can manage these risks. Having procedures in place and someone responsible within the firm for dealing with these with regular reviews of the risks will ensure that these risks are managed.

20. Regulatory Risks Regulatory risks arise out of the regulatory framework in which we practice. See for example the SRA requirements – Code of Conduct or Data protection legislation. Click each box to reveal how you can manage these risks. Terms and conditions of business, the client care policy and a data protection policy all assist in dealing with these risks.

21. Anti-money Laundering The Core PMS require there to be an anti-money laundering policy. Click the policy to reveal what this must include:

22. Anti-money Laundering The Core PMS require there to be an anti-money laundering policy. Click the policy to reveal what this must include: • The appointment of a Nominated Officer usually referred to as a Money Laundering Reporting Officer (MLRO). • A process for making disclosures within the practice and by the MLRO to the authorities. • Identification checking of: – own client – conveyancer acting for the other party. • Training of personnel. • The proper maintenance of records.

23. Anti-money Laundering All relevant staff should receive training on anti-money laundering and conveyancers should be familiar with the SRA money laundering warning card and Chapter 11 (parts 1, 2 and 4) of the Law Society’s AML Practice Note.

24. Mortgage Fraud The Core PMS requires that firms have in place procedures which deal with the steps taken to avoid the risk of mortgage fraud. Firms should appoint someone in overall charge of these risks and should make requirements for regular review and training. • All members of staff should be familiar with: • the SRA warning cards about:- fraudulent financial arrangements;- property fraud. • 2. the Law Society practice notes on: • - mortgage fraud; • - property and registration fraud (produced jointly with the Land Registry).

25. Business Continuity The Core PMS requires firms to have a business continuity plan. Click our business continuity plan expert to discover what this MUST include.

26. Business Continuity The Core PMS requires firms to have a business continuity plan. Click our business continuity plan expert to discover what this MUST include. “Your business continuity plan must include an evaluation of potential threats and the likelihood of their impact. It must cover ways to reduce, avoid and transfer the risk. A business continuity plan should identify the person responsible for the plan and also outline the processes for testing and checking the plan. Finally, it must include a procedure to test the plan annually, to verify that it would be effective in the event of a business interruption.”

27. Business Continuity Firms should consider areas at risk if systems are not able to function. Areas that business continuity may cover are: • IT systems back up and operational failure; • floods and fire; • staffing; • power cuts; • communications failure.

28. Business Continuity Business continuity plans can be tested by: • fire drills; • power shut downs; • checking computer back ups; • communicating with staff without using the firm’s communication systems or out of hours. Records should be made of the checks. Any failures of the plan should be acted upon and changes made to the business continuity plan to reflect this. More information on business continuity can be found in the Law Society Practice Note on business continuity.

29. Question Which of the following areas do you think should be considered when planning for business continuity? (a) IT systems back up and operational failure (b) floods and fire (c) staffing (d) power cuts (e) communications failure (f) currency fluctuations Think about your answer, then click submit to continue. Submit

30. Question Which of the following areas do you think should be considered when planning for business continuity? (a) IT systems back up and operational failure (b) floods and fire (c) staffing (d) power cuts (e) communications failure (f) currency fluctuations The correct answers are highlighted in green.

31. Section 2:Financial Management

32. Financial Management Responsibility for financial management must be documented. There should be one person of sufficient authority within the firm who is appointed to be in charge of financial management. They may be assisted by a finance group.

33. Financial Management There must be an annual: •budget; •profit and loss account; • balance sheet; •cash or funds flow forecast. And at least quarterly analysis of: •variance of income and expenditure against budget; •variance of cash flow against forecast. This is most likely to be through a computerised accounts package. This can provide the required reports monthly or quarterly. These reports must be analysed by those responsible for financial management.

34. Question Is this statement TRUE or FALSE? “Just one person should be appointed to be in charge of financial management.” (a) True (b) False Think about your answer, then click submit to continue. Submit

35. Question Is this statement TRUE or FALSE? “Just one person should be appointed to be in charge of financial management.” (a) True (b) False The correct answers are highlighted in green.

36. Section 3:Supervision and Operational Risk Management

37. Supervision and operational risk management This is the area of the CQS which assists firms in reducing complaints and claims. Structure of the firm. There needs to be a clear structure in place setting out lines of reporting and detailing who is responsible for what. Each area of the conveyancing practice should have a named person responsible for the department. That person must have the appropriate training and experience to supervise the department.

38. Supervision and operational risk management Click each checklist item to discover which processes should be in place to support supervision. Checks on incoming and outgoing post Reviews of matter details Allocation of work Checking for inactivity

39. Supervision and operational risk management Click each checklist item to discover which processes should be in place to support supervision. Checks on incoming and outgoing post Reviews of matter details Allocation of work Checking for inactivity These could be checks by the supervisor on all incoming post or regular spot checks. Firms may consider that in respect of outgoing post checks will depend on the experience and grade of fee earners. Some will need all post checked initially whilst others may only need to have outgoing correspondence checked which deals with substantive issues.

40. Supervision and operational risk management Click each checklist item to discover which processes should be in place to support supervision. Checks on incoming and outgoing post Reviews of matter details Allocation of work Checking for inactivity Supervisors should check that financial procedures are being followed and that fee earners’ matter numbers are monitored.

41. Supervision and operational risk management Click each checklist item to discover which processes should be in place to support supervision. Checks on incoming and outgoing post Reviews of matter details Allocation of work Checking for inactivity Supervisors must ensure that fee earners’ workloads are appropriate to their ability and experience. There should be a documented procedure setting out fee earners’ abilities and the types of work they are authorised to undertake, ensuring that fee earners do not take on work outside their experience without appropriate supervision and training.

42. Supervision and operational risk management Click each checklist item to discover which processes should be in place to support supervision. Checks on incoming and outgoing post Reviews of matter details Allocation of work Checking for inactivity Ways of doing this could be through checking lists of all matters or through case management and diary procedures. It’s important that you find a system that works for your firm and is effective.

43. File reviews File reviews must deal with management of the file and legal content. Practices must set out in their internal processes: •how files are selected; • the number and frequency of reviews; • keep a record of the review on the file and a central record; • corrective action identified should be actioned within 28 days of the review; • designated supervisor must review and monitor data generated by file reviews; • must be a review at least once per year of all the data generated by file reviews.

44. File reviews File reviews should be at least quarterly and files should be randomly picked. The reviewer should not be less senior than the person being reviewed. The frequency and number of files should depend on the grade and experience of the fee earner. It’s recommended that practices develop a standard form for the reviews, which will make analysing the data from reviews easier.

45. Risk Management One person with sufficient authority within the firm must be appointed to manage risk. This will usually be the Senior Responsible Officer (SRO) for CQS. There should be clear lists of the type of conveyancing matters the firm will and will not undertake to ensure that the firm does not accept instructions which it does not have the experience or capacity to deal with competently. These lists must be communicated to staff and kept under regular review.

46. Risk Management Click the risk manager to learn more about their role.

47. Risk Management Click the risk manager to learn more about their role. “The risk manager should identify generic risks of the work undertaken and make sure that these are regularly updated. Generic risks are those that can be identified in most or every transaction. Where instructions represent a high risk there should be a process to ensure that steps are in place to reduce the risks. This could be by a regular review with the supervisor to consider what steps have been taken to reduce risk. It’s recommended that a report is made of these cases to the risk manager, perhaps on a standard document called a risk notice.”

48. Risk Management Once each year the risk manager should carry out a review of risk within the firm analysing: • any indemnity claims; • an analysis of client complaints trends; • data generated by file reviews; • the identification of remedial action. This should be documented to show that it has been undertaken.

49. Risk Management At the beginning and end of a transaction, the risk that each transaction poses should be considered and recorded. Throughout matters conveyancers should be trained to consider any change to the risk profile of a matter and record that change. If a matter becomes high risk, fee earners should undertake the process in the firm’s procedures agreed to manage that risk, for example by review with a supervisor and forwarding a risk notice to the risk manager.

50. Email Policy It’s easy to overlook email correspondence when considering supervision and risk management. However, email should be treated in the same way as any other correspondence, with similar processes in place to deal with supervision and risk management. Your practice must have an email policy. Click the email policy document here to learn what it must deal with.