Risk management

Planning for a disaster

With constant news of terrorist attacks and threats of disruption, this week we will be looking at what firms should be doing with a view to disaster recovery plans.

This concern has obviously prompted firms to consider insurance.

The major reasons why firms insure are to protect the practice financially against catastrophe; to reduce costs of financial distress; and to smooth operating cash flow.

In addition to your insurance cover, it is important and a necessary part of good risk management to have a disaster recovery plan in place.

Here are some examples of how law firms should be protecting against the threat of not being able to practise.

- Who's in charge? Probably the most important part of contingency planning is having someone in charge of organising all staff.

This person should have an up-to-date list of telephone numbers for all partners and employees kept outside the office, so that as soon as a problem occurs he can telephone everyone and let them know what has happened and what they should be doing.

- Offices.

If the office is uninhabitable, you need to have an alternative location in mind.

Whether it be an archive office in another building, or even using another practice's offices or meeting rooms.

A client would rather come to a makeshift office if it means completing on time, as opposed to waiting weeks until your current offices are up and running again.

- Computer files.

All computer systems should be properly backed up so that if anything goes wrong with the computer, files will be current up to the previous day.

The discs used to store the backed-up data, should be kept in a fireproof and waterproof cabinet and preferably away from the office.

- Files.

Hard copies of all files should also be kept in fireproof and waterproof cupboards and cabinets.

Your files are always your main back-up when disputing a claim of negligence; failure to produce such files because of damage will probably mean that the claim is upheld.

- Supplies.

It is important that you also have access to telephones, fax machines, computers and headed paper.

A client trying to complete to a deadline is not going to be content with the excuse that your fax system and telephone lines were down and, therefore, you could not complete the deal in time.

Disaster recovery plans should be an intrinsic part of a law firm's risk management procedures.

Clients are notoriously unsympathetic to anything which might result in their work not being completed as they would like.

Having a comprehensive system in place should help to ensure business can continue as usual should disaster strike.

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