1. Managing risk – it’s good for business!
Tim Livesley, Risk analysis and research manager

2. are two sides of the same coin
RISK
Risk to the SRA’s regulatory objectives and risks to law firms
RISK
are two sides of the same coin
RISK

3. Up for discussion today
An outline of some of the key risks in this year’s Risk Outlook
How managing these risks in your firm can protect your clients and improve your competitive edge

4. Risk Outlook 2014: Key risks
Misuse of money and assets
Money laundering
Bogus firms
Lack of
diverse and representative profession
Poor standard of service to vulnerable consumers
Information security and cybercrime
Lack of independence
Improper or abusive litigation
Can go through these quickly, and then say, now we’re going to look at some of the risks in more detail, and outline the benefits to your business of successfully managing them
New Outlook was published in July 2014, followed by an autumn update this month
We consulted with many different practitioners at events in London, Birmingham and Manchester
Attendees at these events are worried about many of the same risks that we are trying to manage
More information this year about how risks apply to different types of firms, particularly smaller practices

5. Key risk: bogus firms
Reports to the SRA are rising – 548 in 2013, we expect the 2014 total to be higher
Why managing this risk is good for your business
Protect your reputation
Protect clients
Prevent business losses – e.g. bogus firm is on other side of transaction
SRA action
Red alert hotline
Scam alerts on website and Twitter feed
‘In the shadows’ paper
Guidance
Police referrals
Impact on confidence in use of legal services
The majority involve identity theft
Bogus firm could steal your identity, or you could unwittingly work with one
4th bullet point – you need to be aware a bogus firm could have stolen the identity of your firm or you personally, but also that you could come across one in your work, such as operating on the other side of a conveyancing transaction.
Self search = google yourself and your firm to check for any rogue websites etc. You can also provide advice to your clients, such as what official addresses from your company look like, or that only you or x alternative colleagues will ever call them.
Suspicious incidents – could be that someone mentions a case they believe you are involved in, but you have not heard anything about it.
Can cause serious harm to consumers:
Loss of money
Identity theft
Failure to achieve justice
Simple solutions
Check firm details
Regularly self-search
Check scam alerts
Be alert to suspicious incidents
The SRA's Red Alert Line is , or

6. Key risk: lack of a diverse and representative profession
A more diverse workforce benefits clients and the public
There are some positive trends, but still some way to go
Could say something along the lines of – we’re starting with this one as it’s often a controversial inclusion. However, there is clear business and client benefit to looking at the diversity of your team and any barriers to access or progression. The chart shows the difference in pay between different groups of solicitors. The pay disparity is present at many different levels of practice, and the male/female pay gap is larger, at 30%, in the legal profession than in the general population (10%).

7. Key risk: lack of a diverse and representative profession
Why managing this risk is good for your business
Recruit the best talent
Attract a more diverse client base
Diverse points of view lead to better decisions
SRA action
Collect and monitor data
Diversity benchmarking toolkit
Looking at improving access through Training for Tomorrow
Monitoring our own workforce diversity

8. Key risk: information security and cybercrime
Average annual cost to a small businesses is £4000
Federation of Small Businesses
Why managing this risk is good for your business
Information security is a key selling point…
…and for many a requirement
Simple steps – big impact
SRA action
Cybercrime and cloud computing reports
Alerts
Internal data security measures
Specific guidance – e.g. Windows XP expiry
Keeping confidential information secure is a key professional duty
Growing problem for all businesses
But there are other ways confidential information gets out
The average large business faces an attempted cyber attack every few days
63% of small businesses were attacked by an unauthorised outsider in 2013
‘But there are other ways confidential information gets out’ - e.g. overhearing a confidential phone call, failure to properly dispose of confidential waste. A local authority solicitor was recently fined by the information commissioner’s office for losing confidential child protection papers.
Annual cost stat – source is the Federation of small businesses
Unauthorised attack stat – source is PWC

9. Discussion points Your views on the key risks?
How can we improve our resources to help firms manage risks more successfully and cost effectively?
Spring upda, always consulting internally and externally to monitor risk etc.