And Fears

Hopes for the New Year faded fast yesterday as our first day back brought the first request for advice regarding the LSC and “financial hardship”. My conversation was overheard by Andy and Dean who were contemplating our response to the new SRA Code of Conduct and Lexcel. By chance they were at O(10.3) and IB(10.3 & 4) of the CoC*, whilst I was looking up reporting responsibilities under Contract, S 21.7, 2010 CDS Contract.

The latter is less demanding than the former which states as follows;

notifying the SRA promptly of any indicators of serious financial difficulty, such as inability to pay your professional indemnity insurance premium, or rent or salaries, or breach of bank covenants;

notifying the SRA promptly when you become aware that your business may not be financially viable to continue trading as a going concern, for example because of difficult trading conditions, poor cash flow, increasing overheads, loss of managers or employees and/or loss of sources of revenue;

Leaving aside obvious flippant remarks about LAPSO and “loss of sources of revenue”, many of the above features strike me as being almost endemic to LA practice. Perhaps we should also add to this list “increased and expensive borrowing occasioned by unreasonably late payment from your main sources of revenue”.

*I will spare the detailed explanation as to the structure of the CoC for now – or better still ring either of the above.

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