Better than cure: a smarter approach to compliance and risk management
Monday 10 October, 2022
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55% of SME law firms think they need to change their risk management practices. It’s hardly a surprise, given the sensitivity of the data, accounts, and communication that firms handle, and the consequences for breaching regulations. The normal urgency of risk management is aggravated by the fact that many firms are facing a recruitment crisis — they’re understaffed and their teams are overstretched, and in those conditions, it’s easy to miss filings, deadlines, or legal standards.
In any conditions, risk management is a matter of the firm’s reputation, and perhaps even its existence. As such, any firm should be certain that its risk management and compliance processes are as robust as they can possibly be. Here’s how to do it.
Onboarding
It goes without saying that when the law firm onboards a client, the anti-money-laundering and credit checks that you perform must be thorough. Of course, diligence is never quick, and however assiduous your checks are, they’re still prone to human error.
If the options are speed or thoroughness, any ethical firm will choose the latter. Fortunately, either not either/or — you can streamline the onboarding process and actually decrease the chances of missing anything.
Legal Software that performs those checks will do so quicker than a team member could, and with greater accuracy, providing peace of mind and leaving teams with more available time.
Case Management
Once clients are onboarded and the case is underway, seasoned solicitors can manage their cases with ease, but that’s not to say they or newer fee-earners couldn’t benefit from some assistance, especially when the firm’s headcount is on the lower side.
Case management software monitors the case’s progress and notifies it of any missing information that it might not have noticed. It also gives prompts for outstanding tasks and approaching deadlines, and provides automatic escalations.
Additionally, the same platform centralises document storage while keeping all information secure. Even with a hybrid workforce the firm can rest assured that they are well protected from data breaches and security lapses.
There’s then little to no danger of the firm breaching compliance by failing to meet any obligations.
Legal Accounts
Unlike other businesses, law firms have to run their clients’ accounts as well, at least as far as they relate to the cases they handle. Add to that the myriad regulations and requirements of the SRA, HMRC, and the Law Society, and there’s a compliance minefield in front of every solicitor.
With so many ways to get legal accounts wrong, firms would do well to install a safety net for reassurance and proactive disaster prevention. By letting software handle the accounting for income & expenditure, budgets, cashflow, and VAT, and client accounts, you support the legal accounting specialists who carry one of the heaviest compliance burdens in the practice. In that case, they can complete their checks and postings in less time and with less stress.
Billing
Inaccurate billing is embarrassing for the firm and frustrating for a client, so it’s obvious that it’s something to avoid from a reputational point of view. However, when the inaccuracy is with something like VAT calculations, there’s a major compliance risk. The same SRA, HMRC, and Law Society legal accounting regulations apply. There are of course also specific requirements for issuing time recording, disbursements, and expenses, so each bill needs to satisfy those.
Arranging every bill to meet stringent regulations is a time-consuming task which is fraught with danger, which is why automating as much of it as possible is such a wise preventative measure. The software can rapidly and accurately apply the correct VAT, issue bills by regulations, and correctly incorporate disbursements and expenses with ease.
The smart approach to compliance
While a cliché, the truism that prevention is better than cure is something that law firms, solicitors, accountants, practice managers, and legal cashiers feel acutely. Given what’s at stake, any ‘cure’ to breaching compliance will at best be unbearably stressful, and at worst non-existent.
That’s why over a 1,000 law firms use Insight Legal. In some of their own words:
“Insight Legal Software is an excellent software for legal accounts. It’s easy to use, and produces all the reports required by SRA. I have been doing legal accounts for 25 years and have used a number of different software before, Insight Legal is by far the best.”
“As a qualified accountant, I perform book-keeping services and prepare management accounts exclusively for solicitors. Having first-hand experience of several legal software systems, Insight Legal is my favourite. Several of my clients now use it, and I would have no hesitation in recommending it. I find the financial accounting & reporting functions second to none, and support, when needed, is excellent.”
To make sure your practices and compliance is beyond reproach, you can start in just 30 minutes with a demo of our software. Just half an hour could be the beginning of years and years of reassurance.
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