While law firms have always faced risks, today’s “connected” world creates a broader range of challenges and pressure points than ever before.
What Are Pressure Points?
Pressure points are the intersections of technology, people, and process that pose a risk to the firm.
In the context of law firm operations, ‘pressure points’ refer to the critical junctures where technology, people, and processes intersect, potentially creating vulnerabilities that could put the firm at risk. These pressure points are often areas where change or disruption—be it from technological advancements, human errors, or process inefficiencies—can cause significant problems. By identifying and understanding its pressure points, a firm can take steps to mitigate risk, ensuring more robust and resilient business operations.
Some of the most common pressure points to identify and defend against include the following:
- Technology: Technology is the great enabler. It can help streamline workflows, improve efficiency, and even reclaim lost billable time. However, it can also be a significant source of risk. Cybercriminals increasingly target law firms to gain access to valuable data. Ensuring that the digital tools used are fully secure can be incredibly challenging. Outdated and unreliable technology exposes the firm to other cybersecurity issues, including shadow technologies (technology used outside the scope of the firm’s knowledge to get work done, communicate and collaborate). It places the client’s information and the firm’s strategy at risk.
- The Human Element: Even with advanced cybersecurity protocols, the firm and its clients are at risk from human missteps and mistakes. Phishing is a technique predicated on human gullibility, for instance. However, a malicious attacker is not the only source of human-caused mistakes creating risk for your law firm –communication errors can easily lead to claims against the firm. Failure to inform clients on essential matters in a case, or even failing to return a phone call, can lead to malpractice claims.
- The Wrong People: Clients and colleagues can create risk in their own right. Not conducting appropriate due diligence before taking on a client can lead to negative repercussions if there is a lack of internal resources necessary to represent the client properly. Teaming with other lawyers on cases can present an additional risk if they lack the required expertise, fail to communicate, or do not take appropriate steps to protect data.
- Convoluted Workflows: Inconsistent procedures and ineffective processes create convoluted workflows. These areas waste time, meaning that non-billable tasks take longer than they should and cause the law firm to bleed money. Any of these can create bottlenecks that slow productivity and cost the firm time and revenue. It’s about more than lost time and money, though. They can also cost the firm its clients through late communications, missed deadlines, poor work product, or ineffective case management.
- New Opportunities: Even creating new opportunities within a firm has risks. Investing in new practice areas, finding innovative and creative solutions to complex problems, identifying policies and procedures that are no longer useful to make room for new thoughts and ideas, and pushing past established boundaries to create purposeful change have risk factors that must be considered.
Protecting the firm and the firm’s clients requires a proactive posture based on a deep understanding of these dangers. Not understanding these threats puts the firm at a higher risk for dissatisfied clients and malpractice claims. A risk management plan must be in place to guide the firm in mitigating threats should they become a reality. These risks are just the tip of the proverbial iceberg. It is critical to proactively mitigate these threats, from cyberattacks to fallout from missed communications or mishandled information.
Risk Management and Accountability
Accountability in risk management means being responsible for understanding risk, understanding the consequences of risk, and following through with the firm’s decisions to manage risk within the firm’s risk management plan. Many organizations are unclear on whom the risk owners are beyond the executive accountabilities required by regulation. Thus, gaps endure in creating and maintaining an effective risk management plan.
Lack of accountability for the consequences of risk, whether a breach was intentional or accidental, places the firm in jeopardy. If there are no consequences, the rules in place to protect the client, the firm, and the members have diminished or are of no value.
Clarity on who in the firm is responsible and what they are responsible for can make risk management manageable for all and effective for the business. Everyone is responsible for behaving according to the organization’s standards and risk appetite, and clear frameworks for rewards and consequences must exist for management to reinforce these behaviors. Some risks will have effects, implications, and costs much higher than others, so all risk is not created equal.
A clear, concise, holistic, and actionable risk management plan coupled with a robust cybersecurity program is absolutely necessary to:
- Ensure the highest protection of client information,
- Close gaps around areas of potential malpractice claims,
- Build a fortress around the firm’s infrastructure, and
- Protect employees simultaneously.
Any and all changes that a firm makes in policies, procedures, and processes, must be vetted and weighed against its risk management plan and cybersecurity program.
In conclusion, law firm safety and security impact both employees and clients. Creating a culture of safety and security within a law firm fosters a healthy and productive work environment for employees, enhancing job satisfaction and overall well-being. Prioritizing health in the post-pandemic era is crucial to protect employees and ensure their continued engagement in their work. Additionally, law firms must develop effective cybersecurity programs to protect client data, mitigating the risks associated with cyber threats. By investing in technology, training, and client communication, law firms can establish trust, safeguard their reputation, and provide a secure environment for their employees and clients.