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During the years of plenty, managing risk was paid a certain amount of lip service, but unless a firm experienced a negligence claim or had a particular problem with professional indemnity insurance there has been a lightweight approach.
As the old adage goes “boom time hides a lot of dead wood” and whilst the good times roll and the money flows in, it is human nature to push inefficiencies onto the back burner and let the strong team members carry the poorer performers. However, when the party is over you can be left with a very unpleasant hangover.
There are now some strong motivating factors driving firms to strive for improvement.
The fact is that in these much tougher times, the lenders and professional indemnity insurers are looking to firms to operate in a much more risk averse way in order to want to do business with them. The legal profession has to pay long overdue attention as to how best to manage their business and improve efficiency.
You will need to have some clear ideas about what preventative measures and steps you need to take to help make your business more robust and strengthen your risk management techniques.
The Law Society’s Lexcel Practice Management Standard, and for conveyancing firms, the Conveyancing Quality Scheme are a good place to start.
The Law Society’s Conveyancing Quality Scheme has been underway for 10 months and it is clear that conveyancing firms are extremely keen to be awarded membership.
The motivation to apply is directly connected to the standards now required by the lenders.
800 firms have now been awarded membership with another 700 applications currently being processed. At this point in time I believe that many firms have sent in their application and completed the Core Practice Management Standards section but ticked mainly “working towards” or have ticked “yes” and are now quickly trying to get their house in order.
Whilst this is a stressful process the benefits are immediate, but the fact that firms suddenly have to learn new tricks at a time when they are already under pressure is a risk in itself. Who can take on the extra work load and who will drive these standards through the practice are issues that every firm has to think about. Putting the systems in place and developing the right policies, procedures and processes is a headache; getting a team of people to work with them and embrace change can seem like a mountain to climb.
Managing risk is largely dependant on managing behaviour which is not tangible, and in a profession that thrives on structured rules and regulations it can prove challenging.
LBS Legal can assist you in achieving your goals and meeting the desired quality standards. We provide all the tools and coaching to take the headache out of the process and take you through each stage to ensure you manage risk effectively.
Client Relationship Manager
T: 0113 385 4483
M: 07432 695 289
The Law Society has issued a practice note about the risks to solicitors posed by this new legislation, which came into force on 30 September.
The SRA has urged all practices to check HM Treasury’s consolidated list of asset freeze targets, which lists designated persons subject to financial sanction under EU or UK legislation.
The practising certificate renewal period opened on Monday 2 October.
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