Legal compliance is about having appropriate knowledge and an understanding of the rules and regulatory requirements operated within the legal profession; it also about operating in an ethical and moral manner.
Firms must be careful not to try and interpret regulations and codes of conduct to fit a particular circumstance knowing that although they may be acting "legally" they may be acting questionably in terms of morality; a good example of this is in relation to advising on tax avoidance schemes, which may be legal, but are seen by the public as being morally wrong. Regulators are likely to see such schemes as potentially breaching Principles 1 (Integrity), 3 (Best interests of clients), and 6 (Maintenance of the trust the public places in you and the provision of legal services).
A firm's unfamiliarity with the rules can result in unintentional non-compliance resulting in a negative impact upon the available resources of the Solicitors Regulation Authority (SRA) so it is important to ensure all staff are trained and know what is expected of them.
A survey carried out by the SRA in 2011 (Attitudes to regulation and compliance in legal services) found that in relation to knowledge of the rules, 170 firms out of the 200 firms surveyed rated their firm as 4,5 or 6 on a scale of 1-6 (1 being very unaware and 6 being fully aware); many firms were aware of their own ability to be inadvertently non-compliant. The report also found that:
"Whilst motivation to comply can be strong, perceived resources could act as a barrier to compliance and have a resulting effect on motivation levels"
The SRA has recognised that there is a perceived regulatory burden across different types of firms and may in due course consider ways in which it can reduce the regulatory burden on firms showing a good propensity to comply.