Canadian Lawyer

20 S e p t e m b e r 2 0 1 4 w w w . C A N A D I A N L a w y e r m a g . c o m law offiCE ManagEMEnt Risk management matters to your law firm You may be talking to your clients about it, but it's also necessary to mitigate risk in your own house. by Marg. bruineMan l ooking to the horizon for shifts in the legal landscape and managing risk have become increasingly impor- tant in maintaining the via- bility of a legal practice. Not only do law- yers face risks by compromising the stan- dards demanded by the profession, there are many external factors at play that could impact the operations of the legal business. "Lawyers are exceedingly risk adverse," says author and lawyer Mitch Kowalski. "We're really good at finding the risk for our clients and we're really good at finding the risks of a compliance nature . . . but when it comes to the business risk and looking at the risks externally, we do a horrible job." Lawyers need to keep a wary eye out on developments and trends to under- stand what they will be up against in the future and adjust for it. Kowalski suggests while smaller firms may not be able to appoint a full-time risk manager or gen- eral counsel like large firms, they should keep a finger on the pulse of the develop- ments within the legal profession and ensure those issues remain on the agenda. He points to the recent introduction of legal services in Wal-Mart stores as an example. While Kowalski anticipated such a move, the reaction of many law- yers was a surprise for him. Many are now reacting to the news by making adjust- ments within their practice when they should have been proactive in anticipa- tion. "The profession was totally caught off guard by that." Daniel Gallivan says risk management is embedded into the culture of Cox & Palmer. The firm's chief executive officer says the Atlantic Canada firm with 200 lawyers is not so big that there's a division between its ownership and management. That allows the partners to see the direct correlation between risk management and the firm's profitability, allowing them to benefit from being involved. "A big part of any management is management of risk," says Gallivan, the firm's Halifax-based chief executive officer. "You have to have a culture to demonstrate that this is how we run our business." He points to specific areas of risk, such as conflicts, credit, claims, technical, operating, client flight, performance, and recruiting that the firm addresses through policies and procedures embedded in its day-to-day operations. Financial risks are managed through segregation of controls. Faye rogers

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