Hello, Aunt. Welcome to today's Webinar. My name's Katie Jackson. I'm a consultant. I work for my own company, which is called Unlimited. I also work with other consultants. Jesus. Well, I'm mostly deliver support around compliance related issues. So we're looking at S away related to port CFC related to poor anti money laundering. Support those kinds of things. So today's webinar is about risk management on in particular risk management and the application with, um with within law firms the ah, this is a standalone presentation, Aunt. It comes with a set of notes which are available in your file sharing time. Okay, so if you go to the tab on the side of the presentation, there should be one there for the chap function, which a lot of you are Fine. But there's also something for file sharing. If you click on that, you can download the power point on. You can also download sets of notes to go with that as well. Okay, we have a chat function here, but we have 150 people and the numbers keep going up 157. Now we have 100 57 people watching the Webinar as it's going live, and we've got 350 sort of signed up. So people gonna join is the secession goes on that numbers like it opened down. So there's a lot of people there who are watching. For this reason, we can't respond to questions related to the content of this session completely as quickly as we would necessary. Like because of this year. Volume of people we've got watching. But if you have questions as we're going along, tight them out into the trap function on, we will compile a list of questions later on. Answer those. You might also find the answers that you're looking for within the notes that accompany the webinar on also the slides that are there as well. And we'll come back to you within about a week or so with a list of those frequently asked questions What it looks like. So what? The content of today's session is to look what we mean by risk and how we measure risk. We're gonna have a look at some risk assessment templates and resources on. We're gonna have a particular focus today on what the S R away. So the sisters regulation authority on what they mean by risk and how they deal with it and think about this because, really, it's about setting the tone for the sector. Onda about solicitor standings We're looking at risk application within law firms. However, we're always gonna have a look at risk assessment templates and resources that are out there at the moment on the kinds of things that people are publishing around their own risk assessments on what that means and what that looks like on DSO for If, for example, you're working in a sale see regulated firm or your in house solicitor who needs Teoh risk assessments for your own means, then this really is also useful for you as well. You can have a look at this. The ways in which we're using risk assessment in this also work and apply for CLC firms. I do work with CLC firms always used to be a CLC Inspector Andi. It's still applicable to a sale. See, Furman, we'll look at some of those assessments later, so we're going to look at the requirements for anti money laundering and Criminal Finance Act risk assessments on. We're gonna have a think about risk management in management as a whole. So how you could risk assess your entire firm? On what? On what? That looks like we have Ah, um, something around hedging. Um, Andi Mitigating risk in there. So thinking about how you commit a great risk and how you can explain that out as well on what that looks like on then, we also have something on the limitations of risk management and how that works on looks. Um, So I'm now going Teoh, move to, um uh So I'm now going to move to the next slide, which is the start of questions. So we had thes started questions that were there. Andi, they are looking at What is risk? Why moneyed risk and what the limitations are off risk management. Um, what the limitations Office management on how that looks. Andi operates. So what I want to do then, is I asked the start questions while people were joining the room we've got. As I've said, about 100 went out to about 100 70 people in the room s o what I want to do. Well, then ask you all individually to make this contribution is to set a poll out people here. So hang on a second. I just need to go back and sit my eso, if always set up. Hold here. We're gonna have a think about. And if you thought about this and made some notes, what is risk on? Why manage risk and what the limitations of risk management. Think about that yourself. So why you doing it within your own for what does that look like? I'm just gonna set this poll here for you to contribute to. So while then asking you all individually to type into the chap function What are the limitations of risk management? So there's a poll there. Ah, we're going to do Firstly, why manage risk? So if you can have a look, they're gone there. You can do a poll that on cast your vote. Asked what you think. Why would we think about managing risk? People voted there. So directors, responsibilities, business continuity, yet good management. Okay. People are voting good management there. We've also got options I've got on the screen there for financial outcomes also whether yet so we've got some some serious votes there. Good management is going up. Directors responsibilities, business continuity, financial outcomes. Interestingly, we've not got any votes under the hand book. Oh, and ah, um, or Anderlecht. So people are mostly thinking about doing risk management in terms of good management and what that looks like. Eso That's interesting. Eso that those numbers. I'm just like waiting there for everybody toe. Have a think about Ah, uh, casting their vote. I'm gonna end the pole in just a minute so we can move on to what? The limitations are. Waste management. There's some interesting responses there. Okay. So yep. Let's Ah, I'm gonna end the pole now. Okay, So the outcome of that poll there waas looking out that 55% of people who cast the vote there looked up good management next upon down 19% business continuity. So making sure the business can continue if we have a dream bar type scenario how we're going to continue for your Friday afternoon forward. Somebody looks at, you know, taking large drink out of our client account. What does that you know, does that look on? How does that does that ultimately end up ending the business? Some people have voted for the handbook. They're very small percentage. I know that people have looked at financial outcomes on directors responsibilities. OK, so I'm going to have a look then at setting another poll on that is the next question. What are the limitations of risk management? So thinking about it, we can manage some things with risk, but we can't manage everything. So what would you think it was? Limitations. I've given some options there. What? The limitations that we would think about mismanagement so you can cast your votes now for the for the next poll. There's different outcomes at a lot of people are saying can't solve everything with the calculation, you can't predict all the outcomes. People haven't necessarily got time to deal with this and manage it. Well, look at that later is an interesting one as a movement there about whether we're thinking about ethical decision making. So that idea that solicitors have a particular standing the outcome over a scenario might be in the region of saying go Ah, yes, it might be in the region of saying that solicitors have to do things in a particular way into the handbook and what does that mean? What does that look like a lot of people are saying there that you can't predict all the outcome, so that's very strongly coming across in relation to this. So, um, we've got some. They can't solve everything. The calculation. What? You've got a couple. What? Just a minute. Then Teoh cast a vote to know Ah ah, conclude the pole. But most people are saying, though, that you can't predict all of the outcomes and you can't solve everything with with a calculation. Okay, so that really is. Ah, the limitation. So I'm gonna end the pole there. And so for the people that voted there, people have said you can't predict all the outcomes relating to mismanagement. There are a new can't solve everything with the calculation. People have also voted for that idea of the solicitor standing and the question of trust. If we're thinking about risk management, there were different risk calculations that we can do that don't necessarily take account of that ethical dimension. Andi, the way in which is a lister, stuns within the community on how that looks and operates on some calculations that we relate to risk really sit around in financial services, for example, So if we look at the contrast between the financial services regulator on, we look at the contrasting that with where the S R way sits, there is in some ways a different attitude to risk. The SA way sets a particular tone within the sector related to how they calculate risk, and this is available on their website. So there are calculations that they set out there, and there were schools that they relate two different outcomes. So they set the highest with scores, for example, for money laundering for crime by solicitors for dealing with different situations, so that are incredibly serious. And some of the lower risk scores might be taking. You know, that small amount that was mistaken, mate transferred out. Clients can't but actually put back immediately. Some of these things were that there is technical compliance with rules, but there might be a very minor breach for a couple of pence. You know, a small of this score touched that, but a much larger risk or attached to something like anti money laundering, for example, Um, now, in, um, dealing with this which important to think about remember that Theo the, uh yes, away you know is setting a particular tone because they're the regulator for the sector. The COC takes a similar sort of stunts. There's not the complex city in the calculations and the sophistication that you would necessarily have in financial services, where they look at how money is being managed in different ways. On the focus on West is a very much focused on the financial calculations on how that works and operates. There are some aspects of, ah, you know, ethical decision making. Within financial services regulation, for example, they focus on treating clients fairly. However, there's something different within the the, uh, legal services sector, arguably, which is around that solicitor standing on the question of trust Andi House A listers working operate in their community the expectations of confidentiality, the expectations around privilege on the expectations of a certain behavior and standard of behavior that perhaps go beyond what is expected in in other sectors. And so the SA way defined risk as impact multiplied by probability. Why is this useful where it helps us to understand what the SL way will assess on? It helps us to understand how they're setting the tone for what happens in the sector, so you can't necessarily cover everything with the calculation, as we've already said. And you can't necessarily cover that ethical decision making or where there are legal requirements related to respondent mint around that you condone draw what they're sorry requires and defines as risk management within a table. And I've drawn it out for you there. So if you multiplied impact by probability and you've got impact going up the side, they're on, you've got probability going across the bottom, okay? And what that means is you can plot where something might happen. So in your notes, for example, I've given the example off affords that as a client. Okay, So if you had somebody who was not a genuine finds, as we've seen in some of the recent conveyance in cases on the impact that it's had on the sector, the impact that sudden firms, the impact might be very, very high. So you might be looking at the top of that arrow on the side there. However, if you see all of your clients in person and they're all from your local town and you know pretty in your local town on, do you don't accept clients beyond that, the probability of that happening might be quite low. So you might be a the lower end so away from the end of that ever. Andi. So the where you might draw that on the table might be in that top yellow box next to the impact there in the top left hand corner. So your probability might be low of that actually happening cause you know, everybody but the impact of it actually happening would be very, very high. Okay, so this is how the s I way think about on defying risk and you can use this across many different things, including your anti money laundering risk assessments, your criminal finance act, risk assessments, those kinds of things that you want to put in place. You can look at this and say, I can do this calculation, come back and think about what kind of risk mitigations, and it also gives me areas of focus that I can focus on in order to make improvement, shows me where things are most likely to go wrong on how they're most likely to go wrong. So this is what the sa way consider is in fact, a zoo, the risk calculation and they take all of the information that they get in from you in your, um from you. In your renewal, they also take all of the information that they get him from any reports that are made into them. Anything that comes into them, it all is all risk assessed. Okay, on they get have a risk or for each individual firm on you can you might be able to work out what that risk or is. There were published examples on the s always website for you, too, for you to have a look out. So they set the tone for how this looks. But they also for their purposes, which we wouldn't necessarily include is a firm footprint or severity on. What they're looking at is whether a single firm could take out the entire legal services market in effect. Would it have a dramatic effect if elite if a law phone went under Andi, any particularly risky behavior that anybody they might be aware is in George ing in on what does that look like? Overall? So it's worth bearing in mind that there s a way also thinks about this for those large firms or those firms that have a particular focus in a particular area where losing them would be catastrophic in in different ways. Or if a firm is particularly large, you're more likely to see the hallway involved in certain circumstances than you would in other circumstances. So this is what the S. R. A defines us West, but also it's helpful because it helps us set the tone for the sector as a whole. But I'm just gonna have a look in the chat function. Somebody's just asking a few questions. What's the sale see for COC Firm is regulated by the Council for license conveyances. Um, so ah, we've got trapped function here. We've got 180 people with us in the ah, we've got 180 people with those in the webinar. Please, if you have any questions as we're going through this data law, are here to offer some technical support. Make suggestions for you. The documents are available to download that support this weapon are in your file sharing Andi the will answer any questions as we as we go along. Oh, if we'll compile a list and on email them out afterwards. So if you want to think about how to measure with, there's lots of different ways of doing it on. But if you have a look at some of the risk assessments have been produced around anti money laundering on Also Criminal Finance Act those kinds of things, some of them were just textural risk assessments. You don't have to use any mathematical calculation at all. S o. U could just have a gut feeling on your risk assessment, for example, related to our a m o could be a textural piece around a written document that you've written out to say, Oh, this is how we feel and this is what we think the main risks are on. This is how we're dealing with them. You don't have to necessarily use this impact multiplied by probability. Calculations yes. Away, for example, and the Council for License Convinces have all published risk assessments themselves, which only related to these certain things. So you can go on your gut feeling you might make a decision in your head that certain behavior is more risky than others. However, you could also assign a score out of 10 so the impact of that inaction multiplied by the probability and again assign a score out of 10. So if we had affords the client, for example, we might then say Ah, yes, the impact of that would be a 10. It would be enormous on the firm. It's a very small conveyance of is only a couple of us, and it would be enormous because of the insurance implications. We might assign that score of 10. However, we meet everybody in our local area and we never deviate from that. So the probability of that happening might be a to Okay, so then you might be in that category. We say What? Okay, this is ah, you know, a 20% risk and it gives you a total with school. Can you reduce that down even further by risk mitigation? Well, in this case, you might be insisting on saying Yes, I'm going to see all of the ideas, and we're also going to do electronic checks on def necessary. A top official. It's Everybody in the local town will go around and visit the teasing question as well. It's not so different risk mitigations that you might then do on that might reduce your score even further below. What's there? OK, so these are the kinds of things that's being looked at. But do you bear in mind when you're doing this kind of exercise that they're so it does this to your firm? So the SA way would look at the turnover of the firm, for example. They would look at whether you've had complaints. Andi, um, reports into the S away and what the credibility of those are, they would look at whether you've had insurance claims and again that might go on your new awful needs a probability and impact measures. So the higher the turnover, the firm, the bigger the impact, potentially the probability. There you're thinking about things like complaints and claims. So if you're having those on a regular basis, so it's higher than usual probability that something's gonna go wrong in the firmest higher. So there's different things that the s always looking at thinking about. OK, so this is how they think about a measure risk and gives you an indicator of how you can do it within your firm. Such the toe overall within the sector on this is quite different how it might be done, for example, in financial services where some of the calculations can be quite complex. Okay, so let's move on to thinking about risk appetite on what we mean by risk appetite. You can, as a firm, decide that you're going to take action relating to everything. Okay, every single thing could be thought about, and that would mean that your risk appetite instead of looking on having something standard. But you've got areas in green. And you might say these are all right down here, these areas in green. So these once, if I turned the white board on, I'm going to just draw around here. These ones down here, these areas might be okay. All right, but these ones appear. I'm gonna act immediately, and I'm going to do something about them, or you might be quite risk averse is a firm. So then you decide that you're going to turn the white board off, that you're going to act on everything. Oh, nothing is acceptable towards is a firm because we're a new firm or because it's more fun, or in some cases, we're gonna act on everything. But some things appear in the red box are going to be a really priority on some of these might wait until later. So I'll just roll a little clock there to indicate a tick top. You might wait on these, but you're going to do something about these particular ones right now. Okay, So it gives you the opportunity, then to prioritize certain things on take certain decisions and as to how you're doing things. There isn't, however, an excuse not to want to take certain actions. So not to comply with your responsibilities, for example, not to continue to operate in a traditional way of solicitors for that's why I was saying it's limitations around risk management. We're late into the stunned standing of this lister in the community on the requirements placed on the solicitor within the community, including those legal requirements for having those risk assessments for anti money laundering. Andi for for criminal finance, for example, if we want to think about and think about some inspiration for risk, we can think about what kind of categories we can do this on. We can use this as a management tool across the firm. Now the S O. A handbook is changing. There used to be a real focus on the 2011 handbook around risk management as a as a whole and appeared so many times throughout the handbook. It was definitely there, and you needed to have a, well, them firm. Now what they're saying is you need to have systems in place on there are definite requirements out there for you to think about anti money laundering, risk assessments, for example. However, as we've seen in the polls at the beginning of this, thinking about risk management is a good part off good management, directors, responsibilities and good governance. Sometimes we need inspiration to think about how we can think about risk on. We can categorize our firm into different categories to think about what that looks like on how it works. So, for example, on I've put various different examples of how you can categorize your firm into these lights, but also in the notes that accompany this as well. So there's financial risk. For example, you might think about if you're doing business overseas, what the foreign currency city duration is, or whether there's exchange rates. You might think about your position with investors if you're in a BS on how that works and operates with the firm. You might think about the political positions and how that's going to impact you financially. So law firms that do crime work, for example, what's the political position relating to legal aid law firms that do P. I have been particularly impacted by political positioning around those areas. You can think about your liquidity, your profitability, your debt, your creating performance and I've put financial ratios in the notes that are attached so that people can go away and work on those themselves. You can have a look at the calculations for profitability. You can have a look at calculations for debt and liquidity to work out where you sit. Can you do that for the firm's also around you? Okay, and can you see where you sit? Comparatively could be a very useful tool to think about that, and that's what they do in financial services to think about whether people are making money or not, and in which departments, for example, and how does that work? What are those outlying trends? And I've put those calculations there for you in the new company notes relating to this, you can also have a think about things like I t. Risks thinking about your policies and procedures. Are they up to date? Do you have everything there, for example, the ending to around the money Laundry maids regulations? Do you outsource any of your work to anybody else on What's the knock on impact of the quality related to that? What about your intellectual property of anything you're developing? You know, how is that working? And often law firms now are branching out into different areas. How does that work and look and operate organization of this? This is where your regulate tree risk might come in, but also things like health and safety communication internally, making sure everybody knows what they're doing on. And, you know, could there be any external interference? What's the risk of that? Have you got any particularly, ah, well known clients, for example, that might be the target of something running. So there were lots of different examples Sorry within your essawi within your notes to think about within your firm when you're thinking about risk management as a management tool, but also know only that you can help you plan for the future. If you think about your financial risks on where you go, you can could use that as a camp parroted to think about the other firms around you. If you can obtain their financial data or anything that's published about the where do you sit asshole on, for example, In the conveyance in sector remortgage is something that you know there's no profit in it. Also, there's, you know, the average recharge were remortgage relating to the expenditure. On that there's there's almost nothing you know, no money. And so the profitability of the profit margins in that already small weaken do comparative across the sector to see who is making the most money on on how that works on operate. You can also, if you want to think about this more strategically, so think about this within the market, and we have seen some firms be very badly affected. For example, P I firms I've been very badly affected. There are tools out there that you can use to think about where you're going strategically as a whole as a firm, so they might be, for example, if you did a swatter pest analysis. Now, some people ask me what that that stuns for swatted strengths, weaknesses, threats and opportunities are pest looks at the political situation, the economic situation. So you might look at Brexit, for example, on where does that take you? What are the risks associating with that for your law firm, which you know, might be quite dramatic? We had an economic slowdown. You can think about socio cultural factors. So, for example, online services and what that looks on on. We can also think about technological advances on where they go. On the other factors, though, that you cannot honestly could make it up. Estelle, if you want our legal factor, So any legislation coming in that might change the situation on also environmental as well you can do. The other well known analysis you can do is quite similar supporters five Forces, which looks that the external forces on the firm if you want to map the legal services market as a whole, as as a management team, there is something called a structure conduct performance framework, which allows you to think about the economic situation. Asshole. I'll leave you to have a look at that. That's a well, no management tool, but you can have a look at that. Go away and have a look at yourselves. If you want to, it's analyze your financial risk. Comparatively, you might look at your financial ratios, and you might compare that to a few years ago what your profitability is, how much that you're carrying, what that means and how you're using that. Are you using that to generate more profit? All of these things can be analysed using those ratios that were in the notes attached to this as well. And then you can think about how Dover Sephardi Well, what happens if a large thing came? I don't you know a large external shock came along with the firm. Be up to withstand it. What do you need to diversify into new areas in order to tackle that? If you're thinking about legal and regulatory rescue might think about watch lists. For example, Regulator reports that regulators at the moment are highlighting cybercrime is a particular issue. So again thinking about that. But you might also think about the Financial Action Task Force and how that deals with it. Under the AML regulations, you're required to think about what risk your clients pose. So your customers you're required to think about couldn't trees and geographical areas. You required to think about products and services required to think about transactions, and you required to think about delivery channels. So again, all of these different tools and including the ones that in your notes, give you that inspiration for how to plot within your firm. What the what the issues, What issues are. So I just have a look at the the chap there. What is the range of risk calls? 1 201 2000 It's up to you, Hilary. So you can. I mean, I always use impact 10 Probability. 10. Okay, is the max on both on? Then I have it out of 100 on git. Gives me a baseline for any risk that I can score. So I only ever have 1 to 100. But you can a touch anything that you want to whatever makes you feel comfortable. I find it easiest work within that That range of numbers. Okay, So when you're thinking about this and you want to drill down into what some of those specific things are, you might have used some of these things as headings here that sit within these categories, you might have Ah, um, used up Now. That's an interesting question, Hillary. Am I entitled to ask the s a way to provide my this school as a sole practitioner? Could I ask for this is personal data. You might be able to make a request. I'm not sure whether anybody has has done it or not. Yes, Away. Do look and provide information. I would, um it depends on whether or not that's a vote that you want to just to sort of go down. It's not necessarily something that that people necessarily do, but you you might get a response. I don't know whether they would say it was a personal data or not Might depend. Ah, on whether there was an exemption which I think there was for regulation within the GDP Stretching my mind back care to my GP are Ah ah with GDP are down. But whether or not you're you're gonna fall foul of an exemption that which there is into the GDP are for ah, provision of legal regulation. Um, which they you know that they might as a Ah, as a quasar law enforcement body declined to provide all of the information so there might be something that you get that there might not. Um so s so what I'll do Hillary is we can have a separate conversation if like so. Ah, Teoh To sort of come back to that if if if that Ah the delay range of scores relates to how the s always schools risk the s always risk Scores are available Hillary on their website So you can have a look at those to see how they how they look at it. Okay, so But I'll respond to you separately, sort of after the webinar. If that's okay, and we'll we'll write to you with details with details of that and show it with everybody. So if you're looking for inspiration as to how these sort of go down S o i t risks, you might then have related way. So you have her coming on from that? Um yes, eso you might then come on from that in terms off icty wrists and then you've got fired Afternoon for you might have also hacking. Okay, so Ah, there's lots of different I t respect gives you an example, so you can have these headings. But then you can also have this, you know, top down as well from that as to what comes out of it. Okay, so turn that clear that whiteboard on, then from there, you might have the risk mitigations that sort of sit under that. Now, this eyes just because of you smart art on this, uh, on this particular one. But you could, you know, the hacking could sort of go there, you know, and then you could have it. That would also be for the i T department. You know, your mitigations could also relate to those things as well as relating to what's there for fired. Afternoon. Forward. So you got your I T department, for example, business continuity plan. If something went seriously wrong and it's a malicious ransomware was downloaded, for example, on you might be mitigating situation or making it less likely by having staff vetting, training and support. Ah, but on then, um, the most, um, clear that go. So let's have a think about this. What you can do is think about having risk descriptions in the side. This is an example of a table that you could use for on. You could use it for your money laundering regulation risk assessment. You could use it for lots of different types of risk assessment. So you describe the risk that the firm is facing. You allocated a score, you allocated a probability score. Oh, I'm David is just an example fired afternoon Ford of risk that you might face, and then you allocate it, allocated a total school on. Then you convert down any risk mitigations that you have. So, for example, your wrist descript toe might be forced to client. You mainly have a local clients on humanely, but you have a few remote find so remote clients you're not going to see in person. And so, um, you're ah, you're, um, Impact school. If you had there, you might put ah, um, for those ones, you might put 10 remote clients again. If you had affords decline might be 10. But if you see the, uh, local clients in person, you might allocate that, too. But you might allocate your remote clients. Probability might be higher, so you might allocate that one of five on. Then you multiply that out and you get 20. Um, you get 50 and then you have to think about what risk mitigation that you might have in place. So you might have risk mitigation. That relates to, for example, having a partnership with an estate agent that was further away. That might be a risk mitigation here, Andi, They're going door Financial Advisor. So you might have partnership with regulated, regulated individuals to check i. D. So then you've got your risk mitigation in relation to that. Okay, so that's an example of how you can put that into a table related to this. Let me wipe that from the white board. What I want you to do now is just toe have a look at the problem that's on there, and I've put this in a sticky note which goes on the top of the chat function there on. We're gonna have a look at this in a minute, so I'll just read it to you. You were in a small to partner convincing firm in Norfolk. You both worked part time on the practice turns over just under 100,000 year. You need to complete your ML risk assessment on your partner has started it for you. You mostly take clients from a 50 mile Vader's on all I've seen in person. You've never had a concern about money Laundry in. So your meeting all your clients individually on the wall from in there 50 mile radius and you know everybody really well, okay. You've never had a concern about money laundering at all. OK, however, recently and quite randomly, you've received some enquiries from overseas and this completely outside of the usual pattern. So have a look at the beginnings of the risk assessment school for clients on the on the next one your partners started, we're going to look at the next light in a minute on see what scores you would assess on what risk mitigation the firm could put in place. So if we've got it here, this is an exercise that I'd like you to have a go at. So, um, here we've got the partners your partner started your risk mitigation for you on what they've said is all the clients have seen within a 50 mile radius have always seen in person, but they've highlighted that there could be some potential risks. Therefore, you known criminal associations forge passports on potential for tipping off If anything happened, okay? And then you've got your overseas clients. Your risk. Descriptive. Not seen in person, but notice that they've identified are the kind not being who they say they are all a client from, ah, high risk country. Okay, um, so you can. Then if you have a go at this, I'd like you to have put the details on that sticky note that's on the side. There. Have a go at scoring what you think would be an impact score on the firm. Looking at the profile on Have a Scott looking going. What a probability school would bay on a profile based on the profile that's on that sticky note. The yellow stick, you know, in the chat function. So if you have a looking your chat function is there, have put the problem there for you, so you can have a look at it. Same times this on, then. I'm a total school. Are now there any risk mitigations that you can think off? Do you can put into place relating relating to this? So I'm just going to give you um ah. Maybe, uh, five minutes to have a go at this on. See how you get on. Okay. So what are you seeing while we're getting or not? Just have a look and make sure we haven't do anything else on the chat. That's why we've got it there. We can see. Ah, you know, client within a 50 mile radius. Always seen in person the potential vessel. No known criminal associations forged passports, tipping off if something went wrong. However, think about what the impact school might be on the firm on What the likelihood of that happening in the first place. Okay, on then. Overseas clients and not seen in person. Ah, the what? The risks are. They've identified decline not being here. They say they are. What would the impact be on the firm? Just assigned a score. Whatever you think on, then they likelihood of that happening. Okay, So a sign that a score out of 10 and then multiply them together to get your total school and then think about what risk mitigation you might put in place in relation to that. Okay. So Ah, I'll just give you a couple of minutes to go through that. If anybody wants to add any answers that they've got, you can put it into the chat function for people toe. Have a think about if anybody's got any, otherwise, just go through that on your piece of paper that you've got in front of your on the notes or just have a sit and have a think about that yourself. What do you think the impact would be? What would the probability be on? What's any risk mitigation related to that? So if anybody has any questions from today session, you can also add them to the chat function. Onda. We will come back with a list of answers to those. So yet we've got a contribution here Overseas Current. You could have verification from this lister in the in the overseas country, some people are coming up with their scores. Is this strictly for conveyancing firms? Notes for any firm? Um, I've just used conveyancing as an example, so you could use this for any firm it'll so you could use it for a P I firm. For example, you could use it for a crime firm you could use. If anything, I'm just using as the conveyancing as an example off something that, um you know that that's that's out there that the ah, you know where we can use that As an example. You could say, For example, if you're a P I firm, you know, what's the, uh, likelihood of receiving client that is conducting sham litigation, For example, how do we import answers? I'm just going to give some answers in the second Patricia on. Then you can have a look and see whether or not you I wanted to do this. So you've got this example in your, um, notes there, you can use this for your own firm. Think about the risk. So they're used those headings. Think about any risk that your firm might be facing on. Then think about how likely is the happen what the impact is and any risk mitigation that you've got, um, overseas client confirmation from a notary public certified identities. That's yet these are all good examples. So people are putting things they're into, um, into that, so I'm just gonna add some stuff in there so you might then say, in relation to this, you know, the impacts of some of these things. Oh, hang on a second. Clear that three impacts of some of these things, and you can largely Ah, make this up. Yasmin, is there for more guidance on risk mitigation available in some cases, there is with the legal sector affinity group guidance on also, they, uh, the financial action Task Force guidance. So this is there are lots of different on the s always out there talking about the kinds of things that you can do. Um, but you might say for both of these the scores somebody has said on I probably agree with that that the impact scores might be quite high in relation to that. So I'm not gonna add a natural impact schools, But you can. I could put temperature in actual impact scores in there. So the impact scores relating to all of those things might be 10 aunt again down here. You can just make these numbers up. There might be nine or 10 depending on what the outcomes might be. But the probability in relation to some of thes things might be quite low. So because they see everybody in person, they know what's going on in relation to this thing. So you might have put a probability school in relation to their of about three. And I'm just making these things that you can think about this because it's just an example. Andi again, the probability of this because they don't seem any of thes climbs. The probability relating to that might be quite low. But you could and people and we can multiply those that won't do that now because we're because of the time. But, ah, we can, um, in relation to some of these. And people have particularly come up with some good examples down here. Identity verified by another. Absolutely. So? So you put that into your box there, and you started your risk assessment related to ah related to anti money laundering. Now you can use these tables in your practice. Did evidence what you've done in respect of that? Just clear the white board there. Now what? Ah, yes. So thank you, everybody of your contributions on that. What Paul Philip has come out and said is that the risk assessment that people buy in relation to anti money laundry needs to form the backbone off their anti money laundering approach. So Once you've done your risk mitigation, you can then add in, um, a new school. So you want you Don't you risk mitigation. You might come out with a different school. See my old to it. You might bring it down, for example on. Then you might put in a review date that you're going to go back because you're going to keep that. Ah, what you're going to you're going to keep under review eso to go back. And what Paul Phillipos said is keep this under review and keep it updated all the time. So we're bender wise. The overseas probability lower If you have a look at the sticky note there, they're now getting overseas enquiries, but it's not within the usual pattern, so you're getting less of them. Okay, so that's why I've allocated it as being less of a problem. That was the only basis I have in respect of that. If you felt that, for example, you were mostly seeing clients from a high risk country, for example, yes, so shouldn't it be more of the client is overseas and in high risk country? We haven't got on establishment that the client is definitely in a high risk country of allocated at a lower probability. But if they were in high risk country, Yes. How do you identify harvest countries? The Financial Action Task Force has a list on their website. Okay. And it's a nice one with a map, and you can click on to see which ones are currently allocated this high risk countries. Um, so then, ah, let's clear that. So just bear that in mind, but you can add an extra tables for thinking about whether your risk mitigation would bring the school down on. Also, you can add in a review date so you can go back and look all the time in relation to that. You don't have to do, um, high risk eso. You don't have to do risk assessments in this form it all if you want to, you can have a look, and there are links within your notes in relation to this. So thinking about you conduce a written risk assessment. So just thinking about a textural risk assessment that you can put in place so you don't necessarily have to do a scored risk assessment at all. So if you have a look on the Council for License Conveyances website. They've got risk assessment in written form relating to money laundering risks and mitigations relating to that. Things that firms can do the same with the legal sector affinity group guidance that gives you textual analysis of risk mitigations that you can put in place. I've also done a weapon after data law that uses far of use That gives you questions to answer on thinking about how you can use some of those things to bring down the risk of certain things. If you want to have a look at that, if you want to have a look at an example. Risk Assessment Related Criminal Finance Act there's a link within the notes as well is aimed at large firms they've published aimed at large firms. But it might be useful for those in small firms as well. And also the I p C. A. Also has a risk assessment resource White up from Haiti, Marcy relating to Criminal Finance Act as well within its a link within the notes. Yes, I'll raise risk Assessment is presented both in written form andan table formers. Well, looking at how that's operated on the s away do publish risk scores that they would use to score certain things, but they also published text risk assessments as well, so you don't have to do it in this tabular format. You can do a text with the assessment that says, This is our firm. We mostly see clients from this basis. This is what we think about on. There's also an example there from the Law Society of Scotland that they have asked us for used by member firms only, but could give you some inspiration as to the templates that are out there. So you don't have to do a mathematical analysis or calculation. You can just do a discussion former. And there's different examples there that you can use to the inspiration for the Criminal Finance Act on also for anti money laundering as well. There are also other, different ways off measuring risk if you want to think about this mawr in a more sophisticated way there while financial ratios, as I've said examples within your notes, so you can do those calculations, you could also have a think about what we mean by ah ah, risk and reward on. But that looks like just looking at your question there, David. Yes. The probabilities from harvest countries would be much higher. What we've seen on the sticky note is we've got overseas enquiries, but overseas enquiries does not necessarily quite the high risk countries got to make a distinction between two. But you are quite right. Probability from high risk country will be much higher. So if I'm going back to these risk and reward strategies a risk and reward think you can do this as a calculation as well? On what we mean by that is, and it's not something I advocate in compliance at all. What it means is we think about dividing the gain or the profit that you're going to make by doing something by the amount that you stand to lose by doing it. And it gives you, um ah, ratio is a bit like having a bet. Okay, And it gives you that ratio and what it doesn't take account off is an ethical dimension. So you can just do a basic risk reward. You don't Then think about how you stand. There's a solicitor. It doesn't necessarily take that into account. Um, you, uh So you know quite a flat ah, calculation inlet. In respect of that, within your notes, there's a link to of our calculation, and that's a measure of volatility in a market on it could use to calculate your loss potential loss on investments. Okay, and it uses a normal distribution curve in order to do that. So if you're thinking about your return as a manager or was an investor within the firm and you think about the financial element of this, which is very important to ensure financial stability within firms to make sure you're effectively investing within firms, a viral calculation can be a useful way of doing that. And we can also think about a normal distribution curve on that that can help us analyze risk as well. So a normal distribution curve we could use, for example, to on there was a drawing within your notes. Okay, we could use it to analyze complaints, for example, and see any out liars in respect of that, so anything that you can draw where there's where you're looking at something that can be measured in terms off a range of possible outcomes which can be observed and plotted so you might say this is theatrics, for example. So the average, what we've got along the bottom here is the amount paid out. Eso amount paid out down here, paid out for complaint. I just use this as an example, and then a side you've got, um, number off times and then appear you might say that the average ah amount that you've had in relation to a complaint you might you're paying out is £500. Okay. And then, um, that might have happened, Let's say in the region off, um, 10 times. Okay. And then, um, you might have here you have maybe nine or something similar at 250 on maybe another nine over here. Eso another they go on. That is 7 50 on what it allows you to do is within any department, have a look and see what the amount is being paid out on complaint within your firm as a whole on anything that you might be up to plot where there's a normal range and it expected outcome on anything beyond that, you might have an indicator that there's something of I. So, for example, anything down here hope just getting pen. Anything down here on anything that pay, Um, could be used to say This might, for example, be a P I. If you just draw that quickly this down here, you might question what's happened in respect to that, whether there's a detriment in relation to client, whether there's any risk there in terms of ah Ford or in terms of what's happening in respect to that. What they're motivation waas in respect of those games and complaints. But you can also doing analysis overall, to see whether their range of that changes over time or changes in relation to a department. So if you have a lot higher amounts in one department than this or some departments have particular spikes or that might happen at certain times of year, it can help identify problems. I'm plot them out. So you're thinking about what that might look like. So there's an example. There's examples of these things within your notes on how to think about them. There's also something called also put in there something called Ah beater analysis On. Just to be aware of that beater analysis thinks about the expected rate of return on whether something is outperforming the market. So if your law firm is doing particularly well in comparison to the rest of the the market, why is that OK? People might start to question that on the S away. Look at a beater analysis to think about whether or not somebody is out performing, and if so, why that is So what's the average in combination to a particular, um, you know, a particular mode of law. What are you practicing in and what you charging? What's your average profit? In respect of that on, Are you outstripping your competitors? If so, how are you doing that? And is this illegitimate business, for example? So they might look at those at those kinds of things? You can look at that and say, If you're an out liar, if you fall into one of these categories outside, what the SA way might expect to be a norm if you fall at the either end of anything within a normal distribution, people might start to question what that is and what it looks like so we can use normal distribution curve to, um to think about how we go forward without just as ah, note on hedging. Hedge can be anything that the offsets a position. Okay, way. Talk about this in financial services a little bit more on, let's say, for example, people can take out insurance policies relating to the position of Coke and call for the liabilities that touch the latter Quite high. It's, ah hedging position in relation to that beat some form of insurance policy. We can also see hedging within legal services in relation to things like consumer protection. So thinking about the compensation from, for example, thinking about the way in which we think about insurance policies now the s away have recently come out for freelance solicitors on said that they don't have to carry the same insurance they might know also have those protections under the compensation from a massive risks that sit within that for those individual, that's it within that for those individual, um, uh, you know, solicitors on you might if you're an individual solicitor, think about sit setting up your own insurance. What does that look like? And is it worth setting up? Is a freelance a lister? Do we have to specify And how does that? What does that look like, yes, thank you for that. Matt will provide a link to the financial Action Task Force further to discussions related to this after the session as well. If anybody want it's that So A hedge, Um is, ah, um related to that Onda. Also, there can be things that you can set up within your firm in relation to that. What would happen in terms of business continuity, and where does this go forward, and how does that go there? Some firms set up their structure in particular, to separate out on toe, reduce the effects of losses, but also with contractual agreements. Other people might take it on and buy out. Some people are in this position as we go forward thinking about how they're going to retire, for example, so anything that you can do to mitigate a loss where there won't be some contractual or the financial obligation relates to could be seen as being a hedge or drifted. Um, yes, I will provide. I'll give some talk on freelance solicitors and the rest. There are some things just as a final note to say that we are going to risk struggled to risk manage and I just want to provide. That was an emphasis point to the end of the session on that is around thinking about. We always have to do certain things. We always have to abide by our responsibilities relating to Copan Coffer, for example. What's in the handbook but also suspicions relating to money laundering should be with port. It's the N. C. A. Risk management is a tool that helps us understand the situation and thinks of steps to take in relation to that. So that's how we can use it on it sheds light on the unknown. There are ethical aspects of solicitor work that we always have to think about. So Copan coffee is a good example being that that sounding point to make sure that those rules up reach. We also have to make sure that we're thinking about clients and making sure that with handling client situations in what way, including representing people before the court, making sure we're dealing with our responsibilities to the court as well. There's lots of different things within that. That's what is important things about how the s always sets the tone for the for the ah, for the sector evil on. What will also do is I'll also provide a link where the s L a has those risk scores were firm, so you can see how they I don't think about it, provide. That's well, So that's been years to the end of the session. Thank you very much for watching. We've got a list on the chap function there. Of the things that were going. Teoh, come out, I'll provide links to the Financial Action Task force. Some details of freelance cynicism will have a look back there to see what else people have been asking, whether we can provide some, some set for guidance in relation to that. I know there's some questions earlier. One about freedom of information in the GDP are there are published risk scores relating on the res website um, where we have looked at what we mean by risk. And we've looked at how toe think about a measure risk. There's some examples of risk assessment templates that publicly available and some resources on this. Examples relating to the anti money laundering you can use for criminal finance at risk assessments as well we've thought about with management and management is the holes are taken mismanaged. Look on you No use. This is inspiration across the firm, including financially. On Also, we thought about what we mean by hedging risk on mitigating risk as well. We've also had that strong focus on what we mean by limitations of risk management. Were been did Yes. If you have a look in the links that ah, the A company this on the notes There is a link there to criminal finance act risk assessment templates from different sources. OK, but relate to hate to Marcie. OK, eso thank you very much for watching that brings us to the end of the session will go through and have a look at those questions and on will provide a list with frequently asked questions and links. There is a quiz that accompanies this. I suggest you have a read of your notes first because there are a couple of answers that specifically contained in the notes. Otherwise, thank you very much for watching
Webinar
Notes
12841 Users
1275 Courses
931 Reviews
