The Executive Committee of the Group have been aware for some time of the uncertainty that exists over the rules for the supervision of offices. Following discussions with staff in the Law Society and the Office for the Supervision of Solicitors (OSS), the following guidance has been produced which the Executive Committee hopes will clarify the issue for members. At the start of the project, Executive Committee members were asked to indicate the arrangements that existed in their own practices, and it was clear from the analysis of the responses that it is possible to have different approaches to management and supervision and still comply with the Law Society's regulations.

This guidance has been discussed with the Law Society and the OSS but is not definitive and is intended only to be an interpretation of the current position for sole practitioners. Complaints are considered by the OSS on a case-by-case basis. We hope that this guidance will avoid the need for any such complaints.

The formal rules as to supervision changed on the 23rd December 1999. The old rule and a commentary is in The Guide to the Professional Conduct of Solicitors 8th edition at paragraph 3.08 and 3.09 (Pages 73 -- 75). Sole principals should read 3.10 (p 76) as much of this is still relevant.

The new Practice Rule 13 (Supervision and Management of a Practice) is shown at p.113 of The Guide. Copies of the Practice Rules can be obtained from the Professional Ethics Division of the Law Society (0870 606 2577). They can also give confidential advice on the application of the rules.

The Regulation Review Working Party set up by the Law Society's Council, are in the process of a wide-ranging exercise in redrafting the rules based on the Core Duties of Solicitors, of which Core Duty number 9 refers to management and states: "As a solicitor you must operate appropriate business systems and procedures to meet your duties to clients".

The Core Duty will be backed up by a set of "Business Operations Rules, which in turn will be accompanied by not mandatory guidance.

It will be some time before Council is asked to make of the new rules. The purpose of this guidance is therefore to assist in the interpretation of Practice Rule 13 as it now stands.

The key elements of the rule are as follows:

• it imposes a general duty to ensure a practice is properly supervised and managed, supported by examples of evidence that could be called upon should a failure of that duty be alleged;
• it requires every practice to have at least one principal who is a solicitor "qualified to supervise": that is, a solicitor who has held 36 months of practising certificates in the last 10 years, and has completed the training specified from time to time by the Law Society (currently12 hours in management skills training);
• every office must have at least one solicitor qualified to supervise for whom that office is his or her "normal place of work". This is defined in note (e) to the rule as "the office from which he or she normally works, even though the day-to-day demands of practice may often take the solicitor out of the office";
• an office must, for every part of the working week, have a solicitor based there who is "qualified to supervise". It is no longer possible to have a legal executive or newly qualified solicitor managing an office with a 3 year qualified solicitor going in to supervise (but subject to the transitional arrangements in the rule);
• no solicitor can be the sole solicitor qualified to supervise at two different offices for the same part of the week;
• notes (f) and (g) deal respectively with working away from the office and the absence of the solicitor qualified to supervise, and will be highly relevant to sole practitioners.

It is a basic principle of conduct that principals are responsible for the acts and omissions of their staff. This applies at all times and cannot be delegated. However, at an operational level, supervision and management under Rule 13 can be "delegated within an established framework for reporting and accountability". An assistant solicitor might therefore be able to perform the functions of the solicitor qualified to supervise.

The supervision under the rule covers the professional overseeing of staff and the professional overseeing of clients matters; management encompasses the day-to-day control and administration of the practice and staff.

As a matter of good practice the sole principal should open the post, or at least supervise its opening, and should be personally aware of all the post which enters the office.

Good practice also includes the sole principal supervising all outgoing post or being satisfied that a suitably qualified person is dealing with the outgoing communications.

It could pay dividends to draft, document and follow office standards and procedures, or alternatively to implement a recognised external quality programme. This is because, if a breach of the rule is alleged, the principal must be able to produce "evidence of a systematic and effective approach to…. supervision and management".

The rule acknowledges that the demands of practice take a principal out of the office. When the principal is absent in court or on business during periods of the day, so long as there are sufficient staff remaining in the office to deal with the requirements of clients and the principal is able to give sufficient supervision as to the affairs of clients and management then the requirements of the rule are likely to be satisfied.

In the event that there are no staff to take telephone calls other than the principal then there must be an arrangement to forward calls to a mobile phone answered by the principal, a telephone message agency (subject to the duty of confidentiality), an answerphone accessed daily or some similar arrangement whereby calls of clients or third parties can be received.

As to supervision whilst the principal is on holiday, sole practitioners, as evidenced by the questionnaire amongst the Executive Committee members, fall into two distinct groups. The first group wishes to have no contact with the office at all and are happy to engage a locum, or colleague solicitor having the necessary 36 months practising certificates and training to supervise the office.

The second group feel that the engagement of another party is, to a certain extent, counter-productive and that they are prepared to remain in contact with the office or available to be contacted by the office.

If the sole practitioner is going to be away for a normal holiday period of up to a month then, "suitable arrangements must be in place to ensure that any duties to clients are fully met". The nature of the arrangements will depend largely on the nature and size of the practice and the experience of the Staff. So long as there is proper supervision by the solicitor of the staff by virtue of regular telephone, e-mail or fax communications, supervision of the office may be satisfactory to comply with the rule. The principal should have confidence in the ability of the staff to open the post and receive faxes and e-mails and advise the principal of any issues of which he or she should be aware.

Crises may occur which cannot be dealt with at a distance. To cover this eventuality the principal should have made arrangements with another sole practitioner or another firm for another solicitor to attend in case of an emergency.

The essence is that at no time should a client's affairs, or duties to others, be unreasonably impeded by the absence of a solicitor. An example of this would be the fact that a client's request that his or her money be withdrawn from the client account was unable to be met because, in the absence of the sole principal, there was no one else in the firm able to sign a cheque.

A practical answer to this could be for the principal to make suitable financial arrangements in advance. The principal must, however, bear in mind that in putting in place any such arrangements, the protection of client money is always paramount. One approach could consist of the principal holding the client account cheque book, and making cheques available by post as necessary. The principal will need to have systems in place to make sure that he or she is in funds to write those cheques and that the details on the cheque are correct.

Alternatively, he or she could have an arrangement with the bank to confirm bank transfers, which may be ordered by the office under the instructions of the solicitor. A specific authority signed by the solicitor must be in place before the transfer is made, and again verification of the details of the payment must be undertaken. It is not satisfactory to provide uncompleted but signed client account cheques for completion and use by the staff. Any pre-signed cheques or bank transfer instructions must have all the details completed in full and be used under the instructions of the solicitor.

It is acknowledged that in the circumstances of an absence of a week or more the sole practitioner is not able to see incoming post or other communications. In those circumstances the sole practitioner must have sufficient confidence in the office staff that the solicitor will be made aware of all incoming post, faxes, e-mails or telephone calls that need to be dealt with so that he or she can make a decision as to how those communications are handled to ensure that the client or others are not unduly inconvenienced.

If a sole practitioner does not feel able to give a sufficient degree of attention and supervision to the office whilst away on holiday, or during an absence of whatever length, then a locum or supervising solicitor should be engaged. Absence of more than a month indicates the need for regular alternative supervision by a solicitor qualified to supervise. It is a matter for the principal as to whether the principal wishes to liaise with the locum.

At the end of the day if a client is inconvenienced and a complaint is made, whether as a result of negligence or client dissatisfaction, it will be for the sole practitioner to justify that his or her management was reasonable in the circumstances. If a client's affairs are not dealt with and the "solicitors duties to clients and others are not fully met" and a complaint is made, the OSS will want to see that the principal has given thought in advance to the supervision of the office during his or her absence.

If there is a risk that duties to clients and others cannot be fully met during absence then a locum or other solicitor qualified to supervise must be made available on a regular basis. The sole practitioner should give a power of attorney for another solicitor to supervise in circumstances of incapacity.

The new rules, under discussion at present, will give principals a greater discretion in the manner in which they carry out supervision. Taking into account that wider discretion it will be for the principal to show that he or she has exercised that discretion reasonably in the event the problems arise or complaints are made.

A reasonable exercise of discretion can best be shown by there being a written policy in place as to the supervision of the staff and of the client's business both in normal circumstances and also in the absence of the principal. It would be a useful exercise to prepare such a statement for use in conjunction with the current rules to show that the sole practitioner has given specific thought to the issues involved in supervision and management. This may be incorporated within any practice management standards such as Lexcel, but could usefully be prepared separately by sole practitioners who do not intend to apply for quality mark accreditation.

We hope this guidance is wide enough to cover most normal eventualities, but if any further individual guidance is required the Executive Committee of the Group will be pleased to provide further assistance. Please contact the Group's Permanent Secretary on 0207 320 5801. Alternatively please contact the Law Society Professional Ethics Division on 0870 606 2577.

The Group gratefully acknowledges the help of staff in the Office for the Supervision of Solicitors and in the Law Society's Professional Ethics Division

April 2002