In the November 2020 issue of Briefing Pinnacle’s Head of Risk and BD Practice, Christopher Young looks towards risk management in 2021.
Within Risk & Compliance our observation would be that firms are doing a good job of undertaking the risk assessments as they take on matters – Conflicts and AML assessments are getting ever more robust and whilst the AML evidence gathering can be tedious and time consuming it is being completed. To achieve this, we have a powerful tool – the releasing of the matter number; as risk and compliance specialists we have a hold over the fee earning teams – by not issuing them a matter number until they have done all that they need to. This works at matter inception but it doesn’t help us with ongoing risk management.
We are seeing an increasing number of firms looking to understand and manage the risk through the lifecycle of the matter. It has always been an obligation to identify changes but now it’s about the difference between Risk Assessment and Risk Management: Risk Assessment being a point in time action and Risk Management being the identifying of risks and understanding of changes in parameters over time as things evolve or more information is discovered.
We know that Risk & Compliance teams are stretched for resources so most flag things that they see as high risk at the outset, add them to a list and monitor the items on the list. The challenge with this is that being added to the list for monitoring relies on the quality of the data that is input initially – but matters inevitably change as lawyers are executing them.
It’s why more firms are asking us to use some of the new technologies available to dynamically review inflight matters. We have had a Tiger Team that has been working to silently initiate an add party to matter process based on the contents of legal documents as they are being drafted. The lawyer does their lawyerly thing; drafting their document in Word adding parties as they need to. On saving the document, it is assessed to determine whether all of the parties in the document are already linked to the matter. If there has been an addition, an add party to matter request is automatically and silently created; a new conflict search is run and only highlighted to risk if there are new hits generated.
We have also been sharing the outputs of two other Tiger Teams – one that has been developing a Risk Reporting content pack; the other has been developing “Actionable Insights” – embedding simple instruction forms and action buttons into reports. This means that the user no longer has to go to another system to do whatever the dashboard is highlighting – to initiate a bill, to perform a risk check, to add a calendar entry. Instead it allows you to turn reporting from FYI to FYA – for your action – and to fundamentally accelerate the speed at which your firm gains and acts on insights.
There are truly exciting developments going on in the technology arena – things appear to be becoming cheaper and quicker to deliver. Risk teams need to capitalise on these. Having captured considerable savings in office space usage, travel and other cost savings is now the moment to start to focus on automating the identification of the risks within firms? The prize – reducing the inherent risks of running a professional services advisory business – is surely too big to pass up.
You can download the article here
Read November’s issue of Briefing here