Holy risk profile, Batman!
Has there ever been a time more fraught with difficulty for your friendly neighbourhood lawyer?
KAPOW! Connectivity and technology issues.
As the pandemic struck, firms had to adapt speedily to have people working remotely from each other, and from their clients. Many were not ready to do anything other than send people home with a laptop. The risk inherent in this approach was massive- there was cyber threat due to the lack of secure tech being utilised. There were issues around monitoring and supervision. There were few procedures in place to enable collaboration between colleagues, and between fee earners and the finance function of the firm.
BLAM! Resourcing issues.
People were furloughed. People were isolating. Clients went quiet. Then suddenly clients started demanding more services than ever. The conveyancing world reacted to the Stamp Duty holiday and firms were swamped with work. People continued to be off ill occasionally, and the work kept pouring in. The original Stamp Duty holiday was extended, which meant a huge spike of activity in March, and the respite that had been expected after that original deadline never landed. There was huge risk of burnout. There were problems resourcing the spikes of activity from both a fee earner and finance function perspective.
WHAMMY! Cyber Fraud.
Aside from the tech risks from cyber criminals, there were also significant increases in Cyber crime activity. Those dastardly delinquents were seeing the chaos of Covid as an opportunity. The pace at which lawyers were having to work. The pressure from clients wanting to complete before deadlines. The number of financial transactions, and the sheer scale of the funds moving around- all of these had the Cyber villains salivating.
ZING! Client satisfaction challenges.
There were the initial challenges around communication- telephony models were not optimal, and clients and prospective clients struggled to contact their lawyer. Then there were problems of efficiency- when it comes down to it, Mr and Mrs Bloggs want to
move house and they don’t expect it to take six months. They don’t care that there are search backlogs. They want the keys to the new house! On the day of completion, they don’t expect to be sat on the driveway of their new dream home, waiting till five pm for the keys because the firm cannot process the money transactions swiftly enough.
All of these things are risks.
All of them create financial risks, security risks, resourcing risks, reputational risks, negligence risks.
And in the background for all these challenges which are stressful in themselves, there is the impact each will have on the price of the firm’s safety net- their PII policy. In an already hard market, firms need to have a credible answer on these issues. You need to give the insurer and brokers the compelling story that will enable them to achieve the best possible renewal terms for you. That review will look at the way the firm has been performing in all these areas, and they’ll also be interested in changes the firm has made to address any flaws.
Firms should be looking to mitigate risk by, for example, ensuring their internal and external communications are secure; create processes for the safe (but speedy) transfer of client monies; and flag to their PI insurer the steps they are taking to reduce their risk profile.
Or… (and I’m baised!) they could send out the Cashroom Signal! We moved over £1.6bn of client money through our secure portal payment process for our client law firms during June, helping them deal with an unprecedented spike of activity and keep their own clients happy in the process.
Our team were true superheroes and we are looking forward to helping the market answer the challenges to come.
