Training is the key
This month’s risk management article considers the importance of risk management training, and highlights the training resources available to the profession
Solicitors, in common with other professionals, are required to undertake a significant amount of annual compulsory post-qualifying training. Most solicitors will likely wish to focus their training requirements on the area(s) of law in which they practise. But how much annual training is focused specifically on risk management?
Currently solicitors are facing significant risks due to external frauds and scams and, as a consequence, awareness of the risks, maintaining good risk management systems, procedures and working practices and adopting sound information security are paramount in mitigating those risks.
Moreover, most claims are avoidable, and to minimise the risk of costly claims, awareness of the risks and causes of claims is important so that appropriate risk controls can be devised and put in place.
Most businesses will see the value in planning staff training. However, for solicitors, planning is compulsory. All solicitors are required to plan, record and evaluate their annual CPD. As the Law Society of Scotland succinctly puts it (in the CPD section of its website: www.lawscot.org.uk/members/membership-and-registrar/cpd/):
“Solicitors will be required to demonstrate that they have (i) identified their learning needs; (ii) planned CPD activity to address those needs; (iii) undertaken relevant CPD; (iv) evaluated and justified the CPD activity, what was learnt, and how the lessons of the CPD activity can be put into practice.”
Risk management training needs can be identified in a number of ways. File audits, appraisals and supervisory reviews may highlight development needs of an individual or identify gaps in the application of the firm’s existing procedures. An analysis of claims and complaints may, on the other hand, reveal instances where the necessary risk mitigation procedures are simply not in place.
Take advantage of available training: e-learning
Training should be cost-effective as well as satisfying the defined goals/objectives. There is a wealth of risk management training available to solicitors, for example on the Marsh website for Scottish solicitors (www.marsh.co.uk/login/lawscot). The website is a closed website and a username and password are required to access it. Login details are created for each practice and issued to the designated risk management contact for distribution to all colleagues. (If you require a reminder of your login details, please email firstname.lastname@example.org.)
The website contains information on the Master Policy, claims and risk management. There are several e-modules and e-quizzes available on various risk topics. For example, there are training modules covering:
- Frauds and scams
- Information security
- Managing critical dates and timescales
- Client and transaction vetting
- Terms of engagement
- Introduction to risk management
These are all free of charge and qualify for CPD. Several firms have made completion of some or all of the e-modules compulsory, in particular the frauds and scams training and information security e-modules in view of the significant fraud risks presently affecting the profession as mentioned above. Firms that do not currently adopt that approach might consider that it would be justified to make at least the frauds and scams training and information security modules mandatory in view of these risks.
Maintaining awareness is paramount to mitigating the risks affecting Scottish solicitors, in particular being aware of the ever-changing methods used by fraudsters to target solicitors. You can keep up to date with:
The monthly risk management articles in each Journal are specifically targeted to:
- address significant current risk issues (e.g. fraud risk, potential break notice defects); and
- provide practical advice on how to mitigate those risks.
Some of the issues addressed in articles over the past year have been:
- frauds, scams and cyber risks (for example “Fraud – a battle of wits” (February 2016) and “Fraud – raising your game” (March 2016), which address recent fraud risks and in particular fraudulent payment instructions);
- property/conveyancing risks;
- most common types of claim; and
- claims defensibility.
When taken as a whole, a year’s worth of Journal articles could represent a worthwhile part of solicitors’ risk management training and annual CPD requirement.
Both the Society and Marsh regularly issue e-bulletins on a variety of topics and issues. Several risk alerts have also been issued over the past year highlighting specific risks which require immediate attention, particularly in relation to frauds and scams. Risk alerts issued by the Society can be viewed on its website (www.lawscot.org.uk/members/regulation-and-standards/financial-compliance/fraud-scams/fraud-alerts/). Those issued by Marsh can be downloaded from the Marsh website previously mentioned. The risk alerts should be distributed to all employees, and firms should ensure that these have been received, reviewed and understood by all.
Seminars and workshops
Several organisations, including Update as part of the Society’s CPD/training programme, run annual seminar programmes on a range of topics and practice areas. These can highlight new or emerging risks which solicitors should be aware of, and provide a useful forum for discussion, for example new or emerging risks arising from the introduction of new legislation.
It is important that the firm’s management monitor and keep a record of the risk management training carried out by colleagues. By doing so, firms can ensure that, for example, all relevant persons have read, understood and acted on the risk alerts relating to frauds and scams and that the firm’s risk management policies and procedures are being adhered to. Keeping up to date with evolving and emerging risks is paramount for ongoing review of working practices and risk management policies and procedures.
Nada Jardaneh and Marsh
Nada Jardaneh is a former solicitor in private practice, who works in the Finpro (Financial and Professional Risks) National Practice at Marsh, a global leader in insurance broking and risk management.
The information contained in this article provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisers regarding specific coverage issues.
Marsh Ltd is authorised and regulated by the Financial Conduct Authority.