Here’s a seller-focused, plain-English summary of the SRA’s Code of Conduct for Firms—what it expects of a law firm (including sole practices) and how the rules play into preparing for a sale or merger. I’ve highlighted the parts that routinely come up in due diligence and completion planning. Where practical, I’ve cross-referred to the SRA’s own “closing or being acquired” and related guidance. If you want hands-on help aligning these steps with buyer expectations, Jonathan Fagan Business Brokers specialise in sales and mergers of solicitors’ firms and accountancy practices across the UK.

What the Code is and why it matters to a seller

The Code sets the standards and business controls the SRA expects from authorised firms, aimed at creating the right culture and systems for competent, ethical legal services. It’s the benchmark a buyer will measure you against during regulatory DD (due diligence) and what the SRA will look at if anything goes wrong.

1) Culture, fairness and workforce duties (Section 1)

You must treat clients, counterparts and your own team fairly; perform undertakings; avoid misleading anyone; publish diversity data; and ensure a respectful workplace (no bullying/harassment). For sellers, this feeds straight into buyer risk assessments about culture, HR liabilities and reputation. Evidence of recent diversity reporting and staff policies is a simple action.

2) Governance, systems and orderly wind-down (Section 2)

You’re expected to have effective governance, documented compliance, and to monitor financial stability. If you don’t sell and instead go for a closure as part of any deal (e.g., via merger into the buyer’s entity without successor practice status), you must effect an orderly wind-down. Buyers will want to see a written plan: how files, client money, bank mandates, diaries, undertakings and PII are dealt with; and who is doing what and when.

3) Cooperation, candour and notifications (Section 3)

The Code requires you to cooperate with the SRA and be open with clients if things go wrong, putting matters right and notifying as required. Of special interest in transactions:

• Notify the SRA promptly of serious financial difficulty, insolvency events, if you intend to cease operating, and any change to information recorded in the register (e.g., managers/owners).
• Report material changes to previously supplied information about managers, owners or compliance officers, and correct any inaccuracies.

4) Cross-over standards that also bind firms (Section 7)

Some standards from the individuals’ Code apply to firms in full, notably:

• Dispute resolution/court conduct;
• Referrals, introductions and separate businesses;
• When providing services to the public: client identification, complaint handling, and client information/publicity (including the transparency rules).
  For a sale, buyers will test your file samples and website against ID/AML controls, complaint procedures, price/service transparency and referral arrangements. Tidy these up before going to market.

5) Managers’ responsibilities (Section 8)

If you’re a manager, you’re jointly and severally responsible for the firm’s compliance. In a sale, it’s typically managers who give the warranties and disclosures. Demonstrating active oversight—board minutes, compliance MI, remedial actions.

6) COLP/COFA duties (Section 9)

Your COLP must ensure compliance with the firm’s authorisation conditions and regulatory arrangements, and promptly report facts capable of amounting to serious breaches. Your COFA must ensure compliance with the SRA Accounts Rules and report serious breaches of those rules. In a transaction, buyers ask for your COLP/COFA registers, breach logs and SRA reporting history.

7) Client money and undertakings (via Accounts Rules and Code duties)

While the Accounts Rules sit separately, they’re pulled into the Code via the COFA’s obligations and the firm’s overarching duties. For sellers, the headlines are:

• Ensure no client money goes missing; reconcile ledgers; clear residual balances; and document any transfers before completion;
• Maintain a live undertakings register and plan how undertakings will be met, novated or secured post-sale—buyers scrutinise this carefully.
  The SRA also publishes a warning notice on money missing from client account—another reason to clean up reconciliations well ahead of heads of terms.

8) Closing, being acquired or merging—what the SRA expects

If your firm is closing or being acquired, the SRA expects early engagement and the right notifications. Their public guidance and process page covers telling the SRA about the transaction/closure, safeguarding clients, and compliance steps. It sits alongside more detailed guidance on closing down a practice (e.g., file storage/return, accounts, notifications to clients/courts/opponents, complaints handling continuity). Build these SRA steps into your completion and migration plan from day one. A list of closure points and parties to notify is below.

9) Transparency, publicity and referrals—polish for the data room

Because the firm-level Code imports client information and publicity duties from the individuals’ Code, buyers will check your website for price/service transparency and your referral arrangements for compliance (e.g., personal injury, LASPO restrictions).

10) AML and reporting culture

The Code (and linked SRA guidance) emphasises AML systems and a speak-up culture—no detrimental treatment for reporting concerns. Make sure your AML policy suite and training logs are robust; and that any internal reports and SAR processes are documented and followed.

11) Practical, seller-side checklist distilled from the Code

• Governance pack: up-to-date org chart; managers’ minutes; risk/compliance MI; diversity reporting. (Code ss.1–3, 8)
• COLP/COFA logs: breach registers, remedial actions, SRA correspondence; recent Accounts Rules reconciliations. (s.9)
• Financial stability: evidence of monitoring; plan for orderly wind-down if merging/retiring entity. (s.2.4) (
• Notifications: draft SRA notifications (change of managers/owners; ceasing to operate; register updates). (s.3.6–3.8)
• Client communications: templated letters for consent to file transfer, complaint handling continuity, price/service transparency checks. (s.7 cross-over)
• Undertakings & liens: live list; settlement/novation plan; diarised follow-up. (s.1—undertakings duty)
• Website & referrals: transparency rules audit; referral/intro arrangements checked against LASPO and SRA guidance. (s.7; guidance)
• Closing/acquisition plan: align with SRA’s closure/acquisition process and the “closing down your practice” guidance. (SRA process/guidance)

12) How buyers use the Code against the price

Expect buyers (and their PI insurers) to use any Code deviation—missing diversity data, incomplete breach logs, stale reconciliations, sloppy complaints handling, vague AML files—as leverage. Conversely, a tidy compliance story lets you push for cleaner warranties, faster regulatory approvals and stronger consideration mechanics.

13) Where Jonathan Fagan Business Brokers fits in

If you’d like broker support attuned to the SRA compliance realities of law-firm deals, Jonathan Fagan Business Brokers are long-standing specialists in UK law-firm and accountancy-practice sales and mergers (20+ years’ sector experience). They maintain live lists of firms for sale and provide confidential advice on sales, purchases and mergers—useful both for shaping your pre-sale housekeeping and for sourcing matched buyers. (jonathanfagan.co.uk)

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Bottom line for sellers

The Code isn’t just a regulatory backdrop; it structures your sale. Get your governance, notifications, COLP/COFA records, client communications and transparency/referral compliance in order before you test the market. It accelerates transaction timetables, reduces risk-based price chips, and makes regulatory approvals smoother. Use the SRA’s own closure/acquisition and “closing down your practice” guidance to build your completion playbook—and, if you want an experienced broker who lives and breathes this niche, speak with Jonathan Fagan Business Brokers.

Checklist of Bodies to Notify of Any Closure

You may need to contact some or all of the organisations listed below to inform them of the closure of your practice. This list is provided by the SRA and is meant as a guide only, and is not exhaustive:

• Your accountants
• Your bank / building society
• Companies or LLPs using your office as a registered address
• Counsel’s chambers
• Court offices / court records
• Crown Prosecution Service / police
• Directories – professional / telephone
• Information Commissioner (data protection)
• Introducers with whom you have an arrangement
• Land Charges Registry (key number)
• Landlord
• Land Registry (re current matters)
• Legal Aid Agency
• Local authority (business rate)
• London Gazette and one other newspaper (not necessary for mergers)
• Mortgage lenders where you are on the panel
• HMRC
• The SRA, obviously.

Closing Down Checklist

• Plan your closure
• Agree with fellow managers/owners the closure date
• Inform clients of the firm and seek instructions;
• Inform the SRA of:
  • The date of closure of your practice in advance of ceasing to practise, giving reasons for closure
  • The date on which you cease to hold client money
  • The whereabouts of client files and documents
  • Any change in your practice details (eg if you will be joining a new firm)
  • If you join another practice as a manager or have an interest in another practice
• Request revocation of your authorisation or your recognition as a sole practitioner from the date of closure of your practice
• Immediately on ceasing to practise, ensure:
  • staff are informed
  • notice of closure is posted on the door to your offices
  • a message is put on your telephone
  • the closure is notified on your website
  • your notepaper is amended to make it clear that the firm is no longer practising
• notify your insurers
• deal with monies outstanding in your client account in accordance with the Accounts Rules
  • continue to obtain and, where required to do so under rule 12.1 of the Accounts Rules, deliver yearly accountant’s reports whilst you continue to hold client money
• make arrangements in respect of old files and any deeds and documents you are holding
  • notify former clients for whom you are holding deeds and documents or other items
• identify records which you are required to retain by law or under the provisions in the Standards and Regulations and ensure their safekeeping
• in relation to any matters in which you are a trustee or personal representative, take steps to notify clients and other interested parties
• consider what other persons or bodies should be notified of the closure of your practice
• identify any undertakings given which remain outstanding and take any necessary action to comply with them
• ensure when vacating your offices that no confidential information remains
  • arrange for post to be redirected (Royal Mail and DX).