Part 1 of a survey of practical steps, procedures and disciplines which assist solicitors in controlling professional risk and avoiding claims
The key to effective Risk Management in practice, minimising the risk of errors, omissions and client dissatisfaction, must include being in control of your files, workload, clients and clients’ expectations.

If you adopt a thorough approach to Risk Management, then you are likely to be, and to remain, in control of the risks involved in client work, C.O.N.T.R.O.L is the key.


Client Engagement – the process of ensuring that you only act for those you want to, can and should act for. Part of that process involves establishing, reviewing and applying a set of criteria that define the types of client and work which you are prepared to take on and the types that you wish to avoid – for instance on account of lack of experience, resources, level of risk/value, Client engagement should address the following:

  • Client identification – ID checks don’t just ensure compliance with Money Laundering Regulations but protect you too by verifying for instance, that a company does actually exist.
  • Capability – do you have the necessary expertise and experience within the practice?
  • Capacity – do you have the resources required to satisfy the client’s timescales? Don’t agree to take on a piece of work with a tight timescale if the people with the required expertise/experience are on holiday or tied up on other urgent work. Sub-contracting all or part off the work may be an alternative to declining the work in this situation.
  • Cover issues – think too about the potential Professional Indemnity Insurance implications. Is there a requirement to increase the level of the practice’s cover? If so, remember that cover is on a ‘claims-made’ basis which means that cover may require to be maintained at the increased level for several years. The cost of the additional ‘top-up’ cover may mean that the transaction is not cost-effective.
  • Conflict checking – remember that conflicts may not be apparent but may arise during the course of the transaction, litigation etc.
  • Check why you have been instructed? – it may be worth asking yourself, sometimes asking the client, why you are being instructed. If the transaction is in any way unusual of particularly high value, should you be suspicious about the reason for choosing you/your practice rather than, say, a bigger practice, a practice in the client’s own area or a specialist?

Classic Letters of Obligation – the only type of firm’s undertaking that you should ever give – see ‘the Importance of Being Classic’ (JLS April 2001, p40).

Communication – one of the key aspects of effective management of risk. Effective communication ensures that you understand the client’s objectives and the client understands what they have been told.

Checklists – for various reasons, including the complexity of even the most routine piece of legal work, checklists can be an effective risk control method (see previous Journal articles) particularly when combined with case plans and case management systems which can combine automation of centralised diary, supervision, escalation and file review. Various controls can be built in to these applications which help to ensure that defined procedures are followed and timescales complied with.

Critical dates – need to be identified, verified, double checked and then diarised with countdown warnings at appropriate intervals to allow time for action to be taken prior to the deadline.

Contingency planning – each year, many businesses suffer, or are affected by, fires, floods, burglaries or other unwelcome events. The impact on the business depends on a number of factors but preparation is the key to surviving the event and minimising the impact. It is prudent to have a plan in place describing, prioritising and allocating responsibility for the action to be taken if an event occurs as a result of which records are lost, destroyed or inaccessible and the business is materially disrupted. The plan should include a list of contact details of those who may be able to provide assistance according to the type of event. Arrangements might be made for temporary relocation to other premises in the event of the firm’s offices being destroyed or severely damaged. Ideally, there will be facilities to enable IT systems to be re-instated on a skeleton basis, sufficient to allow the practice to continue its business.


Office procedures manual – ideally, every practice should have an office procedures manual. Without one –

  • People may misunderstand or forget how things are supposed to be done;
  • It is more difficult to convey details of systems and procedures in a clear and consistent way, particularly when there are changes of personnel;
  • It is much more difficult to monitor, review and update systems and procedures.

Whether procedures are combined in a single Office Procedures Manual or contained in individual manuals or statements for each area of the office, department or team, the date and responsible person should be identified against the relevant sections to ensure that they are controlled, monitored and reviewed in a reliable, structured way.


No fear culture – no-one in the practice should be afraid to admit that they have made a mistake or that they have got stuck. If there is a ‘fear culture’, then there is an increased risk that someone will be more inclined to conceal a mistake or sit on a problem file rather than own up.

It is in everyone’s interests that colleagues should be ready, willing and able to make the appropriate person aware that a mistake has been made or that they need help. Are new recruits told ‘you are unlikely to be sacked for making an honest mistake but failing to own up to a mistake is an entirely different matter’? it should be made clear who needs to be informed when a mistake is made/discovered.

As for ‘getting stuck’, many firms encourage the practice of having a ‘buddy’ who will help out when mental blocks or ‘perfection paralysis’ strike. The arrangement can operate on a reciprocal basis – ‘skeleton files’ may be swapped on a no blame, no fear basis.

Non-Engagement Letter – it may be prudent to issue a letter to a non-client in any situation where there is a risk that the non-client erroneously believes you are looking after their interests as well as the interests of the party who is your client. For instance, where you act for a council house tenant in the purchase of his or her council hours but not for a family member who is funding the purchase on some basis. Does the family member believe, erroneously, that you will be structuring/documenting arrangements so as to protect their interests?

No! – sometimes the most effective way to manage risk is to avoid it altogether by saying No. No you will not take on a particular piece of work (even for an established client) because you are concerned about the level of expertise that may be required or, for instance, about the sums involved should anything go wrong. No you will not agree to take on Mr X or X Ltd as a new client because you don’t particularly like the sound of the transaction and you are not completely convinced by the explanation they have given for approaching your practice.

Sometimes it may be difficult to say No. Saying No to a powerful client who is pressurising you into a particular course of action that you consider unlawful, unethical or just ill-advised. There are examples of, even experienced, solicitors being prevailed upon by forceful, highly persuasive and devious clients in this way.

In a future issue, this article concludes this review of how to stay in CONTROL of risk by looking at –

Terms of Engagement


0 (Zero) tolerance for dabbling, non-standard undertakings, obvious conflicts

Loose ends

The information in this page is (a) intended to provide guidance on matters of practical risk management and not on issues of law, (b) necessarily of a generalised nature and (c) not intended to endorse or recommend any particular product pr service. It is not specific to any practice or to any individual and should not be relied on as stating the correct legal position. Alistair Sim is Associate Director in the Professional and Financial Risks Division at Marsh UK Limited

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