As legal professionals, it is crucial to manage the risks we face daily and learn from our mistakes. The common goal of most professionals is to prevent messes in the first place. Building Compliance That Works is fundamental to being able to demonstrate resilience and self-reflection on internal policies and procedures.
In the legal sector, professional identity insurance has seen a significant increase, with some firms experiencing a minimum increase of 20% in their annual premiums. To combat the increase or limit it, it is essential to prepare early, not treat it as a tick box exercise, utilize a specialist broker, demonstrate that the taint has been removed, put in the work and time to the process, demonstrate your firm’s value on the proposal form, and have a standalone document.
We all have problems, things which haven’t gone to plan, so how do we explain them?
If a problem is identified, Root Cause Analysis should be conducted for each instance. The purpose of this is not to blame a person but to investigate the different factors that enabled the incident to occur. In doing so, effective changes and prevention can be implemented to limit recurrence.
It is essential not to merely scratch the surface and dig down below to find the root cause. If the root cause is missed, the incident is likely to occur again, increasing the risk exposure. Human error is never the ultimate root cause, and firms or individuals should not feel ashamed in near misses. Instead, they should feel confident and empowered to share these experiences with others.
We worry people will fear it is a witch hunt if we dig too much into the issue.
Creating a positive environment to have these chats and building a safe environment where staff are confident that they will not be judged or penalised for asking for help or alerting a person to an underlying issue is crucial. Ensuring that the culture is embedded throughout the firm sets the right undertones for all staff, regardless of level or position.
Risk is there, through firms at all levels, and risks may change, but they are still present. Consider reporting lines or lines of support, whether internal or external. In most firms, the line manager automatically handles reporting lines, which can make people bury their heads and not speak out for fear of repercussions, insecurity, stress, and compromised decisions.
It’s important we face these causes, because without it people suffer. In many parts of the legal sector, (for example Conveyancing in 2022), there can be real risks that are exacerbated due to several factors outside the staff member’s control and, in some instances, the firm’s. Even if those risks do not transpire into meritorious claims, it is inevitable that there will be claims and complaints arising out of these risks, which will have a considerable impact on staff and firms.
Everyone, at one time or another, will make mistakes within their careers, and it is how we deal with them that helps shape our careers and share the firms we work within.
How can we mitigate the consequences of issues arising?
Make it easier to find out what actually went on – Recording file notes is essential, documenting what is done at each stage, what has been found, what the client has been informed of, when they were informed, and by what means, and why the matter cannot proceed further.
Supervise properly – In the remote world we currently operate within, identifying signs in others is crucial. If you are a supervisor, think about how to monitor, motivate, and supervise daily. Remote working adds another layer of complexity, making identifying a gut feeling a lot harder. Make a conscious effort not to focus solely on the work and be visible and personable, building trust and relationships.
Use your data – Data collection and analysis can help fill gaps and identify where and who requires support. Data that could be considered includes low WIP or alternative high WIP, money held on the file, inactive client records, average case length, non-billing for a period, what happens when the file gets to 75% of the fee estimate, and retainer profitability and written off time.
Taking action if you think there might be a problem – doing more file reviews, and stacking the odds in your favour is invaluable regarding risk exposure and learning. Get curious, ask why, and continue learning about your team and how they operate.
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