Risk management

Risk ownership

Does everyone within your practice know the areas of risk for which they are responsible? More importantly, do they understand which areas of risk are pertinent to their departmentss?

Lack of risk-ownership is a problem we often encounter when visiting law firms.

Although everyone may have been trained in risk management, they have been taught an all-encompassing blanket approach.

However, this is not always enough, especially if someone understands the basic principles of risk management but cannot relate them to their specific areas of work.

This holds especially true for newcomers to the practice.

Many firms have a huge risk procedures manual, and new staff are instructed to read this.

Realistically, though, how many of us can honestly say we will trawl through an A4 lever-arch file in order to learn about office procedures? We may skim through it, but with the pressure of fee-paying work and general day-to-day administration, the likelihood of the information being read properly and taken on board is minimal.

Therefore, one piece of advice we often give to firms is to abandon the old office risk procedures manual and develop several smaller processes specific to each department within the firm.

Some general risk management procedures will need to be outlined in all manuals, but the majority of advice outlined in the documents should be solely department-based.

Once these manuals have been prepared, they also need to be kept up to date.

Therefore, it is a good idea to allocate one person within each department to be the risk management supervisor.

It should be up to all staff within that department to report any problems or circumstances that they encounter that may give rise to a claim.

If the problem is something which has not happened before, then an example of such an issue, and advice on how to deal with it, should be listed in the manual.

However, a manual on risk management procedures is not always enough.

If manpower permits, it is a good idea to have the risk supervisor run through procedures, to ensure there are no areas which the newcomer does not understand.

Finally, when employees join a firm they should be given a comprehensive business description.

All staff need to know for what areas they are responsible and of what areas of risk they should be aware.

It is not enough to tell your insurer that you thought employees were properly trained after a mistake occurs.

It is a practice's own responsibility to make sure their staff are fully aware of risk issues and understand what areas of risk-ownership they should be taking on themselves.

This column was prepared by the Alexander Forbes Professions risk management team