How modern law firms can mitigate risk and stay compliant with legal tech

Practical guidance and tips.

Alex Simons was delighted to take part in the second webinar series of Osprey Approach’s Build Better Habits, joining panellists Karen Edwards, head of professional development at the ILFM, and Amy Bell, owner of Teal Compliance. Hosted by Amy Bruce, head of marketing at Osprey, the webinar enabled us to share practical guidance and tips with attendees on how modern law firms can mitigate risk and ease the compliance burden by adopting legal technology.

Mitigating risk by being data focused and adopting the right digital tools.

  • We all agreed that having access to the right technology tools and data is vital if firms are to take a proactive stance with compliance, rather than firefighting issues.

    It’s the basics throughout the accounting processes that cause SME law firms the most compliance issues. When you have a hybrid team, a paper-based system no longer works, especially when you’re dealing with thousands in a conveyancing processes. A scribble on a piece of paper isn’t good enough. The firm needs to stay on system and ensure all data and actions are kept on their CMS, as that will provide an audit trail to keep you compliant.

    All risks to your firm can be measured, and monitored with tech, but the systems have to be used properly and the right data needs to be captured.

Seven habits law firms should adopt to ensure staying compliant.

Karen, Amy, and I agreed that modern law firms should focus on the following digital habits to mitigate risk and stay compliant:

1. Implement control mechanisms

Amy explained that firms need to implement control mechanisms in the technology so you’re not relying on people to remember all requirements. Karen agreed and recommended using workflows to standardise operations and monitor file management behaviours.

2. Be disciplined with your data

Karen recommended that firms should capture all data digitally on a file including key dates, client details and communications so that anyone can pick up the file and progress it.

3. Stay curious

Amy suggested that firms should consider why people are not doing what they were asked to do simply because they don’t like something, so they find workarounds. It’s important to analyse the tech usage and get feedback to understand why.

4. Update little and often

Firms should update their files little and often to avoid compliance errors. If something goes wrong and you’ve not updated your files, then that’ll be picked up on an audit. If you’re in the habit of leaving things late, that habit will get picked up in an audit and they’ll highlight it as a systematic problem.

5. Review and report regularly

I also highlighted the importance of individuals having access to the data they need to proactively monitor compliance. An issue I see regularly is residual client balances and the SRA are hot on this at the moment. You can report every week and send the data to fee earners to action. Tech makes that a lot easier; I know Osprey has automated reports.

6. Set up before you start

For any new software project, I would recommend that firms set up properly before rolling out the system to the wider team. If you want to be compliant and use the tech effectively, you have to set it up properly. If you provide a blank template to employees they will find workarounds and get into their own bad habits.”

7. Prioritise continuous training

Continuous training is important to ensure that firms are using the digital system effectively and the right data is being inputted. Offer continual training to ensure processes are effective. Ongoing training on the system will not only improve confidence of users but enable them to better use the tools to their advantage.

Implement digital habits to build a solid foundation for compliance and risk management.

Implementing the right digital tools, adopting effective habits, and capturing the right data is crucial to proactively mitigating risk across your business. Being proactive will help you stay one step ahead of detrimental financial or reputational damage that is linked to compliance breaches.

For exclusive advice and guidance on mitigating risk with legal tech, watch the full episode, free and on-demand now. Karen, Amy, and I share more of our experiences and knowledge in building a successful modern law firm, including the connection between compliance and your client experience, and how to ensure your culture prioritises compliance.

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