The solicitors’ profession has undergone a sea change in culture over the last 10 years. In particular there seems to be are ever increasing statutory, regulatory, compliance
and risk creep which,for many firms, verges on being suffocating. At the same
time solicitors have been forced to become more commercial and the
business world has become more competitive with fewer firms have retaining a
lock step structure. The resultant change of ethos has caused partners
to become far more entrepreneurial and much less averse to risk.
Traditionally,
the industry has viewed compliance and risk management (the latter
previously known as ‘best practice’) as two separate areas typically
managing them in a silo’d fashion.
the industry has viewed compliance and risk management (the latter
previously known as ‘best practice’) as two separate areas typically
managing them in a silo’d fashion.
Over
the next few years COLPS and COFAs will come to understand that better
integration of risk management and compliance is the direction they must
take to survive. This view recognizes the need to rectify firm-wide
weaknesses that lead to significant operational risk, losses, or
regulatory censure or fines. A
key challenge, however, is how to bridge specific areas of risk and
compliance into a unified and firm-wide approach.
the next few years COLPS and COFAs will come to understand that better
integration of risk management and compliance is the direction they must
take to survive. This view recognizes the need to rectify firm-wide
weaknesses that lead to significant operational risk, losses, or
regulatory censure or fines. A
key challenge, however, is how to bridge specific areas of risk and
compliance into a unified and firm-wide approach.
This
article outlines ideas to help optimize a firm’s approach to risk and
compliance management by leveraging the synergies and return on
investment (ROI) that can be gained from addressing both in tandem
article outlines ideas to help optimize a firm’s approach to risk and
compliance management by leveraging the synergies and return on
investment (ROI) that can be gained from addressing both in tandem
Taking an integrated approach a firm can get the most “bang for its buck”.
The following key benefits exist when taking a more integrated approach to compliance and risk
prevention:
-
Understand the full risk management and compliance profile of your firm and the lawyers working for you.
-
An
integrated approach to compliance and risk provides a more holistic
view across departments or areas of law. It creates an extra “layer” to
review high-risk clients. -
Creates
a culture whereby all the lawyers within a firm have an appreciation of
and contribute towards compliance and risk management. -
Manage
and monitor breaches, track remedial action to minimize your exposure
to professional indemnity. Generate comprehensive reports as required by
the SRA.
.
Law
firms may feel the proverbial noose closing in around it’s neck but an
investment in managing risk and compliance, whether or not it be in
terms of time or technology or both has to made. Doing nothing is not a
viable option. Without sophisticated technology usually reserved for
larger firms, it is hard to produce quantitative and objective evidence
of compliance and risk management ; Success is hard to measure.
firms may feel the proverbial noose closing in around it’s neck but an
investment in managing risk and compliance, whether or not it be in
terms of time or technology or both has to made. Doing nothing is not a
viable option. Without sophisticated technology usually reserved for
larger firms, it is hard to produce quantitative and objective evidence
of compliance and risk management ; Success is hard to measure.
Low-cost
on-line ‘compliance management’ systems such as CLIENTCAREmonitor (CCM) are starting to emerge. CCM was designed to assist small- to
medium-sized firms meet their compliance requirements under the OFR. The
system can integrate with case management systems, is simple to use,
and is highly effective. CLIENTCAREmonitor’s matter-level compliance and
risk management is designed to be used by every fee-earner at a firm,
on every transaction.
on-line ‘compliance management’ systems such as CLIENTCAREmonitor (CCM) are starting to emerge. CCM was designed to assist small- to
medium-sized firms meet their compliance requirements under the OFR. The
system can integrate with case management systems, is simple to use,
and is highly effective. CLIENTCAREmonitor’s matter-level compliance and
risk management is designed to be used by every fee-earner at a firm,
on every transaction.
During
the client take-on and file closure phases of a legal matter, the
lawyer performs CCM’s compliance assessment checklist. The checklist is
presented as a simple one-page screen with multiple-choice questions
that takes two to three minutes to complete. An instant risk
classification, based primarily on the SRA’s scoring metric, is then
produced and the COLP or COFA is immediately alerted to the risks via
their dashboard.
the client take-on and file closure phases of a legal matter, the
lawyer performs CCM’s compliance assessment checklist. The checklist is
presented as a simple one-page screen with multiple-choice questions
that takes two to three minutes to complete. An instant risk
classification, based primarily on the SRA’s scoring metric, is then
produced and the COLP or COFA is immediately alerted to the risks via
their dashboard.
Rationalizing
the use of client take on data and file closure data can result in
effective watch lists and Risk Assessment Mechanisms. The integration of
this data can be used as evidence to support reporting or non-reporting
and can developed over time. In the area of risk and compliance, the
objective is to detect (or even prevent) breaches and risks as early as
possible to mitigate losses and reduce their impact on clients.
the use of client take on data and file closure data can result in
effective watch lists and Risk Assessment Mechanisms. The integration of
this data can be used as evidence to support reporting or non-reporting
and can developed over time. In the area of risk and compliance, the
objective is to detect (or even prevent) breaches and risks as early as
possible to mitigate losses and reduce their impact on clients.
Law
firms will continue to be called upon to do more with less. Especially
in relation to regulatory compliance, but even more relevant within risk
management, where return on investment and impact to the bottom line
can be directly calculated. Coupled with an increased incidence of
fraud and money laundering schemes and more opportunity to register
complaint’s with 3rd parties, the result is a clear necessity to upgrade
systems, streamline processes and improve efficiencies. Additionally,
as we continue through a time of upheaval and reduced earnings within
the legal services industry, lawyers must be even more focused on
customer care and retention. A reputation for strong compliance,
security and risk management becomes a competitive USP and
helps breed confidence with your PI insurer and those who may be
interested in investing, merging or buying your business.
firms will continue to be called upon to do more with less. Especially
in relation to regulatory compliance, but even more relevant within risk
management, where return on investment and impact to the bottom line
can be directly calculated. Coupled with an increased incidence of
fraud and money laundering schemes and more opportunity to register
complaint’s with 3rd parties, the result is a clear necessity to upgrade
systems, streamline processes and improve efficiencies. Additionally,
as we continue through a time of upheaval and reduced earnings within
the legal services industry, lawyers must be even more focused on
customer care and retention. A reputation for strong compliance,
security and risk management becomes a competitive USP and
helps breed confidence with your PI insurer and those who may be
interested in investing, merging or buying your business.
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