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Law firms regulated by the Solicitors Regulation Authority
should take note of the SRA’s expectations when it comes to
equality, diversity and inclusion.

Equality, diversity and inclusion is on the agenda of many
regulators at the moment. In September last year, the SRA published
new guidance setting out its expectations. If you are a law firm,
you’ll want to pay close attention. This article explains
what’s in the guidance and some of its practical implications.
The New Year could be an opportune time for a refresh of your
existing systems and controls, with this guidance in mind.

What’s prompted the new guidance?

The SRA Principles (which set out the SRA’s
“fundamental tenets of ethical behaviour”)
require regulated firms and individuals to act “in a way
that encourages equality, diversity and inclusion”
(EDI).

The SRA first published guidance on what this means in practice
back in 2019. Much has changed since then. Aside from shifting
expectations and practice within the legal industry, there have
been two key regulatory changes since the SRA’s original
guidance:


In 2023, the SRA brought in an explicit rule requiring
regulated individuals and firms to treat colleagues/those who work
for them, and with them, fairly and with respect. This includes an
obligation not to bully, harass or discriminate unfairly.

In 2024, the law was changed to require all employers (not just
law firms) to take reasonable steps to prevent sexual
harassment.

It was therefore high time for an update. In its news release,
the SRA recognised recent progress but acknowledged there is
“more that we and others can do to encourage EDI in the
legal profession” pointing out that:


a diverse and inclusive legal profession is vital in
maintaining public confidence in our sector and the justice
system;

a legal profession that both welcomes and reflects the diverse
community it serves will encourage more people to seek legal help,
improving access to justice;

a diverse and inclusive workforce can deliver benefits in terms
of productivity and innovation.

What does the new guidance say?

The updated guidance can be seen as a codification in some
respects, bringing together the SRA’s expectations when it
comes to EDI and in many places linking to existing guidance. There
are, however, some key additions, including:


Additional guidance for managers on challenging the
behaviour of other people. This builds on the SRA’s
existing Workplace environment guidance (see our
earlier article here). The new guidance includes an example
explaining that a partner at a law firm must act when a solicitor
complains about repeated suggestive comments made by security
staff.

Some new useful case examples about treating
colleagues, clients and others fairly and with respect, and when
acting for clients who behave in a discriminatory way, together
with example communications which may be considered offensive.

A list of example proactive steps
(proportionate to the size of the firm) to encourage a diverse
workforce at all levels. These include keeping recruitment,
progression, reward and recognition policies under review to make
sure they are not creating unfair or unlawful barriers for
underrepresented groups.

New guidance on terminating a retainer with a
client who behaves in an offensive or discriminatory way.
The guidance makes clear that firms should have a process in place
for warning clients that this sort of behaviour may entitle the
firm to terminate the retainer and allowing clients a chance to
challenge any proposed termination.

A new section on reporting obligations. In
this section, the SRA has emphasised: “[w]e do not act on
all complaints and reports. We focus on conduct or patterns of
behaviour which amount to serious misconduct. This will generally
include, but is not limited to sexual misconduct, unfair
discrimination, abuse of position and taking unfair
advantage.”

A reminder that sexual misconduct, unfair
discrimination and non-sexual harassment, are unsuitable for a
financial penalty, except in exceptional
circumstances.

A reminder that, while the SRA is primarily concerned about
conduct which relates to an individual or firm’s legal
practice, conduct does not need to take place in a workplace in
order to relate to practice. Some matters, including
discriminatory conduct, sexual misconduct or offensive
communications on social media, are so serious that they are
capable of damaging public confidence in the solicitors’
profession, even if they are not linked to legal practice.

Two new annexes which set out terms used in
the guidance (Annex 1) and actions that law firms can take to
support compliance (Annex 2). The SRA makes clear at the start of
Annex 1 that when it is considering conduct in breach of its
Principles, the SRA is not constrained by the legal
definitions set out in the Equality Act, nor limited to
considering conduct which is related solely to the protected
characteristics in the Equality Act (more on this point
below).

What this means for law firms in practice

In its news release, the SRA is keen to underline that it has
not changed its approach and that the updated guidance provides,
“further support for those we regulate to help them
understand our expectations and what those expectations mean in
practice.” While the new and expanded guidance will
generally be welcomed by law firms, this statement potentially
creates some uncertainty over whether the SRA would apply the new
guidance retroactively, to situations that happened before its
publication.

While the updated guidance is far more detailed than its
predecessor in many respects, it remains detail light in some
areas. For instance, there’s no example of when it would be
acceptable to terminate a client retainer without notice. Also, the
additional guidance on challenging behaviours only gives one
practical example. In practice, keeping a close eye on decisions
made by the SRA and the Solicitors Disciplinary Tribunal will
continue to be important for understanding the SRA’s
expectations.

You will want to comb through the guidance to check that you are
implementing all the recommended actions. This is particularly so
if you are a large firm: the SRA has made clear that where the term
‘should’ has been used in Annex 2, “the
suggestions are not mandatory for every firm, although we would
expect larger firms to be undertaking many of these actions to make
sure they are meeting their obligations set out in the
guidance.”

Take note, also, that the SRA’s expectations around EDI are
broader than the Equality Act 2010. For example, the guidance
states that the SRA would not only consider the nine protected
characteristics under the Equality Act 2010, but misconduct related
to e.g. someone’s socio-economic background or because they
have a strong regional accent. This makes clear that SRA-regulated
firms are under duties to uphold EDI that go further than the legal
requirement applying to all employers. You’ll want to consider
if your current diversity and inclusion training is suitable to
address this.

What’s next?

The updated guidance and corresponding news release make clear
that EDI will remain a hot topic for the SRA in 2026. Given the new
guidance and the ongoing levels of EDI-related misconduct reports
being made to the SRA (which have apparently not reduced despite
the 2023 Code updates), law firms should look to start the New Year
with an EDI review and refresh, to ensure the SRA’s updated
expectations are being met

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.