How to manage risk

In the increasingly cutthroat world of delivering legal services there is nothing more important than learning to manage the risks associated with the ‘full life’ of a case. Charlotte Parkinson, Modern Law, spoke to Darren Gower, Marketing Director at Eclipse Legal Systems, about the importance of recognising potential risks and ensuring the correct processes are in place from the outset.

Whatever your involvement in the legal profession, it is impossible not to have noticed the ‘compliance culture’ which is rapidly emerging amongst law firms. From COLPs (Compliance Officer for Legal Practice) to COFAs (Compliance Officer for Finance and Administration) and everything in between, the life of compliance and risk management for law firms in light of legislative change is becoming an increasingly important issue. And of course ABSs don’t escape – similar applies for them (but the titles are HOLP and HOFA – Head of Legal Practice and Head of Finance and Administration respectively).

But, contrary to popular belief, the risk process does not stop at taking a photocopy of a clients’ passport. At a recent conference, Samantha Barrass, Executive Director at the SRA said that there needs to be a ‘change of culture within firms and that managing risk and compliance is everyone’s job’ and that the SRA are looking to adopt a more flexible approach to regulation to align themselves with the modernising legal services market. These comments from the SRA, who are calling for a more open ‘two way dialogue’ with law firms, has left some in a state of confusion. Although it is now compulsory for accredited and licensed firms to have a COLP and COFA (HOLP / HOFA), many feel that they are either not in a position to make the (sometimes difficult) decisions required or will be second guessed by the SRA if they do.

While there are obvious benefits of a more flexible approach to regulation, there is also a greater potential for holes and potential pitfalls. Some of the key risks which law firms must be aware of as the market continues to evolve are the risks associated with financial difficulty, lack of correct succession and exit planning and a poor standard of service to clients, particularly vulnerable ones. Furthermore, as more and more law firms look to reap the benefits offered by cloud computing, the safeguarding of sensitive client information should remain of paramount importance.

So, the question that many firms are asking is, how do we manage our risks and how do we maintain a compliant approach? There is risk everywhere in the life of a case and the life of a law firm and your firms’ systems must manage this effectively on a ‘full life’ basis.

Darren Gower of Eclipse Legal Systems comments:

“These days, Compliance is an ‘always on’ function and must be considered at every single step of the way. The software system you utilise must be end-to-end and cater for every stage – and the compliance elements must be an integral part of your core case, matter or practice management systems – not just a standalone bolt-on.”