Law firms fail to face up to risk

A recent study suggests that law firms are failing to identify their risk exposures

A recent study suggests that law firms are failing to identify their risk exposures. Only half of the solicitors researched by accountants and business advisers PKF had considered the risk of reputational damage to their practice, and only 10% had implemented controls to try to reduce potential risks.

Other findings showed that:

37% of participants had formally undertaken a risk assessment to identify the key risks facing the practice and the potential impact on the firm if they materialised

when looking at specific business risk areas, such as managing clients' expectations, 69% had considered the risks affecting the firm and 80% had implemented controls to reduce the risk level

all firms had controls in place to reduce the risk of theft or fraud.

According to PKF, a further concern was that a quarter of the law firms said that they had not set strategic objectives. And the majority of those who did have aims and objectives said that they had little confidence that their staff understood what they were.