In another year of significant change and disruption, the survey results highlight some key items:
1. While data security is still the number one concern for law firms – whether an IT security breach or a data privacy breach – new solutions are going to be required.
Persistent and targeted attacks, along with changing insurance coverage and pricing, mean that risk strategies relating to cyber at law firms are also changing.
2. Risk teams in law firms are growing in importance and size, partly as a result of the pandemic, and partly due to regulatory and stakeholder pressure, thrusting risk into the front and centre of business operations.
In times of economic crises, we normally observe notable cut-backs by firms in all non-profit making roles. It is encouraging to see that law firms have identified the significance of risk teams, and risk professionals are experiencing overall growth in a period when we would usually expect decline.
Enterprise risk management for firms, rather than a focus on the traditional, siloed approach to professional indemnity, cyber, and workforce risks is becoming the norm.
3. Environmental, social, and governance (ESG) considerations and potential reputational damage linked to unsavoury or unethical clients are key concerns for firms.
While ESG considerations sit within a broader and growing corporate social responsibility agenda for all businesses, access to justice, and law firm and individual professional independence, underpin the rule of law. Conflicting concerns over these areas need to be balanced with increasing care.
4. The survey asked firms to think about factors underlying errors – whether active, skills-based mistakes, slips, and errors (unconscious failures), or violations (where ethical or compliance requirements were ignored). The unconscious failures numbered higher than the violations.
Digging into the detail, we see that:
To see whether the issues your firm faces are similar to others, you can download the report on the right.
If you have questions about the risks facing your firm, or to discuss your professional indemnity insurance, please reach out to your Marsh representative.