First SRA-regulated law firm signs up to Bar Council's escrow account
PRESS RELEASE: The Legal Director has become the first law firm regulated by the Solicitors Regulation Authority (SRA) to sign up to the Bar Council’s escrow account BARCO.
The Legal Director, which provides in-house lawyers to businesses on a contract basis, has become the first SRA-regulated firm to secure a waiver from the regulator to sign up to BARCO. This new service allows the firm’s clients to pay for legal services safely without their money needing to be held in a dedicated client account. Client funds are pooled into a ring-fenced Barclays account and not released to lawyers from the BARCO account until they have completed the work for their client. All interest on the funds is returned to the client.
James Mallender, Director at The Legal Director, said: “Using BARCO is a no-brainer for us because much of our work is in-house advisory. Our clients can now use us for their financial transactions and, as we’re not handling their money, they have the peace of mind that their funds are completely secure. BARCO is good for business too. It broadens our service offering and keeps our costs low because the regulatory burden of maintaining a dedicated client account was complicated and expensive. It is another factor that helps set The Legal Director apart from other law firms.”
Paul Mosson, Director of Services at the Bar Council and Director of BARCO, said: “BARCO was originally set up for barristers who do direct access work – those that are qualified to take instructions directly from clients. However, in recent months it has become clear there is an appetite for BARCO within solicitors’ firms too. The Legal Director is the first of those firms to see the benefits of BARCO, not only for them, but for their clients.”
There is a charge for lawyers to use the service, which starts at 2% of the total cost of legal fees, and not 2% of the amount held in the account, and it decreases on a sliding scale as the fees increase, dropping to 1.75%, 1.5%, 1.25%, 1.00% then 0.75%.
The SRA had previously agreed that it would waive requests from solicitors to use the BARCO service on a case-by-case basis, and so the Legal Director is the first firm to secure the waiver and sign up to BARCO.
Direct Access barristers have traditionally been BARCO’s customers. The escrow account allows clients to pay a barrister without breaching rules that prohibit barristers from handling client money. However, because BARCO is a third party, secure escrow account, it is at lower risk of misappropriation than traditional law firm client accounts.
To find out more about what the The Legal Director can offer, please call James Mallender at any time.
Posted Thursday, March 31st, 2016 by Warren RylandTweet
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