What are risk managers for?

The main advantage of formally designating someone as risk manager is that there is a named and accountable person whose task is to consider the risks to the firm and how to avoid them.

This person can, but need not be, one of the partners, but whoever it is, the person chosen must have sufficient seniority to command the respect of the lawyers in the firm.

Without a risk manager the risk management activities get relegated to the bottom of the pile and lurk in the hinterland of guilt, inducing things that never get done.

What activities will the risk manager undertake?

- The risk manager will be undertaking the analysis of risk and reporting on this to the partnership.

- This will involve collating information on risk from departments and from activities that affect the firm as a whole, such as IT or accounting systems or office procedures.

- Staff awareness of risk and its impact of the firm's commercial success or otherwise will be within this remit, with training and the dissemination of information about risk.

- It will be the risk manager's responsibility to draft policies and procedures to avoid risk, prepared in conjunction with supervisors and departments.

- Risk managers need to support supervisors and departmental heads in the implementation of the risk policies and procedures and to ensure that proper credit is given for good implementation.

- Success or otherwise needs to be monitored so that improvements can be made if necessary.

This means collecting data through discussion with staff, file reviews and complaints and claims records - and then analysing the data.

An annual risk review is advisable to consider revisions to be made and new risks on the horizon.

Firms will need to get used to formal risk management but over time the manager will acquire expertise in analysing risk, formulating risk avoidance procedures and dealing with problems when they arise.

Risk awareness will become a skill that enables a firm to shift from a reactive and intuitive approach to risk, to an analysed and controlled risk policy.

This column was prepared by AFP Consulting, a division of Alexander Forbes Risk Services UK Ltd