We are all risk managers!
Each day as we open our front door to make the journey to work we are faced with a number of risks, think of them as things that could go wrong and which could stop us from completing our journey safely. For example, we may not have put petrol in the car and run out of fuel, the bus or train might be cancelled or delayed causing us to be late. Occasionally it may even have snowed overnight or just be extra cold weather. This article shows that we are all risk managers & effectively involved in risk management.
Risk Management is part of everyday life
We do some things automatically to help us avoid problems. For example we might check the fuel gauge in the car to make sure there is enough fuel before we set off. We might check outside to see what the weather is like before deciding what clothes to wear. We might listen to the weather or travel reports to see what traffic or train conditions are like. Events such as snow don’t happen often in this country. The check we make isn’t specific to ‘snow’ – we just generally check the weather. The fact that it has snowed one day doesn’t need to stop us making the journey, but there are additional things we then do to make the journey safe.
We are all natural risk managers
In all of these cases, we are all involved in risk management. We are all risk managers. Having effective risk management, deployed at the outset, can prevent risks from crystallising into problems further down the line.
The same is true every time you open a client file. There are a number of things that could go wrong which might stop us from successfully completing the client’s journey through the firm. Or that could cause harm to the client, the organisation or ourselves along the way. If we don’t act as risk managers & do effective risk management then this could lead to problems such as complaints, negligence claims, policies enquiries, bad debts etc. In the same way, as we undertake some checks for our journey to work, the same is true for these work-related risks. There are a number of checks we need to make to keep things safe. In the work environment these checks are known as controls.
Controlling risk for legal work
The controls (checks) we have in place could include:
- Check what the firm has experience and importantly capacity to do.
- Define that in terms of the work areas.
- Only accept work within it, don’t be tempted to ‘dabble’.
Different risks require different controls. For example, you might have financial checks to make sure you can get paid. Anti-money laundering and anti-bribery checks to make sure you know your customer and the source of funds. Accurate time and disbursement to ensure billing accuracy. Other controls relate to making sure important information has been shared with the client or to manage client expectations.
Consistency is crucial
But sometimes on our journey to work, we forget to make some of the checks. Or we are in too much of a hurry and don’t have time to check. If we are making that journey with another person we might assume that they have made some of those checks and that we don’t need to bother. This can mean sometimes things go wrong, we wear the wrong clothes, we miss the train, we run out of fuel, or we forget our keys. Some of these things that go wrong have a bigger impact than others but all have the ability to cause us problems on our journey to work. It is therefore important to consistently carry out all the checks every time and not just occasionally. The one time we forget to check will be the one time when something then goes wrong.
Avoid the auto-pilot!
The same can be true with opening a new client file, we may forget some of the controls, we may be too busy to do them properly (or at all). We may simply assume someone else has done those checks. Sometimes we go into automatic mode and stop thinking about what we should be doing. At other times our thought processes may get interrupted partway through.
For these reasons it is really important that at each stage we understand what risks exist and the potential impacts of those risks. What controls (checks) are in place to prevent those risks turning in to problems, and make sure we are consistently and fully operating those controls. This will help avoid problems further down the line.
So next time you are opening a new file remember to undertake the right checks. Next time you see its been snowing don’t forget your wellies!! Good luck with your risk management as well as the risks to clients and the firm.