The ILFM Jargon Buster aims to give simple, plain English explanations of typical words, phrases and acronyms used in the legal finance world – to help us all understand what we read or hear day-to-day.
A
Aged debt: Money owed to a firm defined by length of time outstanding (also known as aged receivables)
Aged creditors: Money a firm owes to suppliers and other third parties as business expenses (also known as aged payables)
AILFM: An Associate Member of the Institute of Legal Finance & Management (qualified to Associate Level)
AML: Anti-money laundering
Assets: Things owned by a person or organisation which usually have some value
Associate: A person, usually employed by a law firm, who may be in charge of handling your case. Associates are often a lawyer and are considered by the firm employing them to be a "senior assistant"
B
Beneficiary: Someone who is entitled to a benefit (e.g. under a will or trust)
BOOMs: Approval is required from the regulator for all Beneficial Owners, Officers and Managers at a firm (BOOMs) before a practice can undertake any of the activities that fall under the Money Laundering Regulations
C
Cab Rank Rule: prevents barristers from refusing work because they disagree with the actions or views of those seeking their services. This does indeed have the result that people to whom a particular lobby object can still get the legal representation of their choice
Client Due Diligence (CDD): Procedures in place to identify/check who a client is.
CILEx: Chartered Institute of Legal Executives
CILEx Regulation: Independent regulatory body of the Chartered Institute of Legal Executives.
Client Account: A bank account to hold money on behalf of a client or third party, separate to a firm’s “office account”, in accordance with the SRA Accounts Rules.
Client Account Manager (CAM): Virtual Client Account Manager, also known as Client Money Manager depending on the banking institution. It auto-identifies your client payments and assigns them to the right virtual account. It allows a firm to a physical bank account and subdivide the funds into multiple virtual accounts
COFA: means a compliance officer for finance and administration and in relation to a licensable body is a reference to its HOFA
COLP: means compliance officer for legal practice and in relation to a licensable body is a reference to its HOLP
Costs: means your fees and disbursements
CPD (Continuing professional development): The training that legal and finance professionals are required to complete every year by the organisation regulating them
D
Disbursements: means any costs or expenses paid or to be paid to a third party on behalf of the client or trust (including any VAT element) save for office expenses such as postage and courier fees
E
Enhanced Due Diligence (EDD): Checks to be applied to a client and monitored where a case has been identified as being at high risk of money laundering or terrorist financing: additional or extra diligence.
EWCA Crim: England and Wales Court of Appeal (Criminal Division)
EWCA Civ: England and Wales Court of Appeal (Civil Division)
EWHC: England and Wales High Court; the various Divisions are indicated in brackets after the judgment number. (QB), (Admin), (Pat) etc.
F
Fee earner: Employees of firms who deliver legal services
FILFM: A Fellow of the Institute of Legal Finance & Management (Highest qualification achievement)
FSCS: Financial Services Compensation Scheme
Fees: means your own charges or profit costs (including any VAT element)
G
H
HOFA: means a Head of Finance and Administration within the meaning of paragraph 13(2) of Schedule 11 to the LSA
HOLP: means a Head of Legal Practice within the meaning of paragraph 11(2) of Schedule 11 to the LSA
HMCTS: His Majesty’s Courts and Tribunal Service
HMRC: His Majesty’s Revenue & Customs (formerly the Inland Revenue)
HonFILFM: Honorary Fellow of the Institute of Legal Finance & Management. Awarded in recognition of outstanding contribution to promoting the objects of the Institute in driving innovation, education and in promoting excellence in finance and management throughout the legal sector.
I
ILFM(Dip): A Diploma Members of the Institute of Legal Finance & Management (qualified to Diploma Level - Qualified Legal Cashier)
J
K
KC: King’s Counsel
L
LAA: Legal Aid Agency
Legal aid: Government funding that can help people meet the costs of legal services they require, if they are eligible to receive it. It is also used to support legal assistance being provided at police stations where someone is arrested.
LeO: Legal Ombudsman
LSA: The Legal Sustainability Alliance - Not-for-profit sustainability network run by law firms for law firms
LSAG: Legal Sector Affinity Group provides Anti-Money Laundering Guidance for the Legal Sector
LSB: Legal Services Board (oversees the work of the Solicitors Regulation Authority, which is the independent regulatory arm of The Law Society)
LSSA: The Legal Software Suppliers Association
M
MLCO (Money-Laundering Compliance Officer) Where appropriate to the size and nature of a firm, a senior member of the management team, board, partner or equivalent, must be appointed to be responsible for compliance of the firm with the Money Laundering Regulations
MLRO (Money-Laundering Reporting Officer) A person appointed by a firm who is responsible for receiving disclosures from staff of suspected money laundering and determining whether they warrant the submission of a suspicious activity report (SAR) to the National Crime Agency (NCA)
Multi-disciplinary practice (MDP): an entity that combines a mixture of business activities, including legal activities overseen by the respective regulator
N
National Crime Agency (NCA): leads the UK’s fight to cut serious and organised crime, protecting the public by targeting and pursuing those criminals who pose the greatest risk to the UK
NDA: Non-Disclosure Agreement
O
Office Account: A bank account of an authorised body where payments are made on behalf of clients from a firm’s own money, and where business payments will be made from, such as suppliers, salaries, rent, etc. This is sometimes referred to as a ‘business account’.
OFR: Outcomes-focused regulation is the SRA’s approach to regulation. It allows firms to adopt their own approach, systems and management to best enable them to deliver a good service to client's needs and to support their business. We work in a constructive way with firms to help them comply with the SRA Code of Conduct and our rules. However, we take formal enforcement action if necessary
Onboarding: New client acquisition that requires due diligence checks under the Money Laundering Regulations and LSAG
P
Paralegal: Paralegals (often called legal assistants, property assistants, and contracts assistants) carry out research, prepare legal documents and give legal advice to clients. CILEx (see above) has taken over the Institute of Paralegals. They are trained in legal matters but not as a qualified as a lawyer.
PCPs: Policies, controls and procedures implemented within firms to comply with the Money Laundering and other regulations
Politically Exposed Persons (PEPs): Clients (or their known associates) who may present a higher risk of money laundering as they be at greater risk of abusing public office for private gain. They are entrusted with a prominent public function by a public institution, an international body or a state
Practising certificate (PC): A document issued to solicitors by us which allows a solicitor to carry out certain legal work such as advocacy, litigation, probate and conveyancing
Pro Bono: legal advice or representation provided free of charge by legal professionals in the public interest. This can be to individuals, charities or community groups who cannot afford to pay for legal help and cannot get legal aid or any other means of funding.
PWRA: Practice-wide Risk Assessment required by Rule 18 of the Money Laundering Regulations. Relevant firms must have a written, up-to-date practice-level risk assessment in place
POCA: Proceeds of Crime Act sets out the legislative scheme for the recovery of criminal assets
Professional disbursements: fees of counsel or other lawyers, or of a professional or other agent or expert instructed by a fee earner
Q
R
Residual Balance: funds that remain in a client account after a transaction has completed and which are no longer required to be held by the firm
S
SDDA: Separate Designated Deposit Account
SDT: Solicitors Disciplinary Tribunal
Simplified Due Diligence (SDD): Relaxed type, timing and extent of new client checks undertaken under CDD. Only used where it has been determined that a client presents a low risk of money laundering or terrorist financing
SRA: means the Solicitors Regulation Authority
SARS: Suspicious Activity Reports. The name given to a disclosure to the NCA under either POCA or the Terrorism Act.
T
Third party managed account: means an account held at a bank or building society in the name of a third party which is an authorised payment institution or small payment institution that has chosen to implement safeguarding arrangement in accordance with the Payment Services Regulations (as each defined in the Payment Services Regulations 2017) regulated by the FCA, in which monies are owned beneficially by the third party, and which is operated upon terms agreed between the third party, you and your client as an escrow payment service
U
UKSC: Supreme Court
UKHL: House of Lords
UKPC: Privy Council
V
VAT: Value Added Tax
W
WIP: work in progress
X
Y
Z
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