Compliance Roles under the spotlight in 2026
Governance in law firms is set to be a key focus for 2026 with Compliance Roles under the spotlight.
Last month the SRA published their long-awaited thematic review on the compliance officer function, alongside its consultation on strengthening the checks and balances provided by compliance officers.
What the SRA has said
Compliance Officers for Legal Practice (COLP) and Compliance Officers for Finance and Administration (COFA), play a key role in understanding and maintaining regulatory compliance within firms, as well as recording and reporting regulatory breaches.
However, the SRA ‘s thematic report has highlighted risks arising from the way in which the roles currently function, which has left compliance officers feeling undervalued and under-resourced.
The central findings, which follow visits to 25 firms and interviews with 36 individuals, include:
The role is seen as a regulatory necessity, taken up by default – there is little competition for compliance officer appointments and only 44% felt the role was acknowledged or valued by firms.
Around 20% of compliance officers felt they didn't have the resources that they needed to carry out their role effectively. Nearly half identified lack of time as their primary challenge. On average those spoken to spent only 26% of their time on compliance-related tasks.
27% confirmed they felt it hard keeping up with regulatory updates. Compliance officers spoken to had limited awareness of SRA resources and guidance - only 50% had read the SRA’s reporting and notification guidance, and just 19% had reviewed its enforcement strategy. 25% of compliance officers had not undertaken any training related to their compliance role within the previous 12 months.
In the meantime, the SRA’s latest consultation (which runs until 20 February 2026), aims to strengthen accountability by requiring the separation of key roles within a firm: Namely, that any individual who can unilaterally determine or direct significant management decisions would not be permitted to hold the COLP or COFA role.
The SRA recognises that for some there may be no, or little, alternative. The requirements are subject to a minimum threshold: They would not apply to firms with an annual turnover of less than £600,000 and/or which held a client account balance of less than £500,000 at any point in the most recent reporting period. There is also an exemption for sole owner-manager firms (where the firm is captured solely because its client account balance reaches £500,000) where the decision-maker could still hold the COLP role, but not the COFA role.
Our views
The consultation is a response to an important issue arising from the Axiom Ince events and seeks to find a proportionate balance to ensuring greater scrutiny over decision making and control within firms.
However, the proposals don’t address the reality – the review found that all compliance officers held at least one other role (which included being fee-earners and supervisors) and that around 75% were also owners of the firm – and the capacity and bandwidth issues this brings. Or that, for those compliance officers interviewed as part of the review, independence was not highly rated as an important skill for the role.
The SRA has committed to producing further support, guidance and resources, which will be welcomed. However, the review makes it clear that many of its existing materials are not being viewed.
The consultation document recognises that there remain questions to be answered and that there is a strong case for undertaking a more fundamental review of the compliance regime. There is no indication of when this will be carried out and the suggestion is that this will follow any evaluation of the consultation proposals once implemented.
Steps firms might want to consider
In the meantime, firms will want to look at how they support compliance officers and create a culture where compliance is seen as a wider responsibility across the firm.
Areas to look at include:
Succession planning, reward and recognition - and how to demonstrate the value the firm places on the compliance officer role.
Having a process to delegate compliance tasks and/or, if possible, appoint a deputy, to avoid over reliance on a single individual.
Creating objectives and incentives to reward time compliance officers for spent on training and keeping up with regulatory updates.
Formalised processes and systems for record keeping and reporting, and for checking staff are complying with policies and compliance officer instructions on the ground.
Contact Juliet Oliver if you want to review how you are approaching these important compliance roles
📧 juliet@passmoreoliver.com
📞 +44 (0) 7379 045 653