Risk Management Strategies for a Post-Pandemic Market
During 2020 and 2021, professional services firms coped with drastic changes brought on by the COVID-19 pandemic. To remain successful, firms needed to adopt remote or hybrid work environments and rethink their business and risk management strategies to accommodate their disperse teams and clients.
The Intapp 2021 Risk Staffing Survey revealed that firms have taken a variety of actions to help set up their risk teams for success and better adapt to remote working. “In 2021, we’ve seen … assistance from [technology] … and the professionalization of staff,” said Meg Block, Vice President of Risk Consulting at Intapp, during our recent webinar, “Risk Management Staffing Strategies to Optimize Post-Pandemic Business Agility.” However, challenges around risk staffing, scope of responsibilities, and pace of work remain an issue for numerous firm leaders.
To learn more about how to best approach these challenges, Block spoke with Brenna Greenwald, Regional Counsel and Head of U.S. Business Acceptance at Freshfields Bruckhaus Deringer, and Allison Martin Rhodes, Deputy General Counsel at Sheppard Mullin. Both Greenwald and Rhodes shared the ways their firms reorganized their legal departments and invested in new technology to support their expanding responsibilities and teams.
Growing Your Team and Rethinking Risk Policies
When Greenwald joined Freshfields in 2015, she was the first U.S.–qualified business acceptance member of the legal department. She knew that if Freshfields wanted to provide the best possible service to its U.S.–based clients, the firm would need to add more U.S.–qualified members to her team.
“I was authorized to grow a [business acceptance] team to keep up with what was then slow growth,” said Greenwald. “Obviously, it’s taken off like a rocket since then.” She was able to grow her department from a single, non-U.S. secondee to a team of five U.S.–based and U.S.–qualified lawyers.
In 2020, Sheppard Mullin’s risk organization assumed responsibility for the firm’s docket and calendar function and built out its information compliance or “matter mobility” team to better manage firm compliance with subpoenas, litigation holds, and client file transfers. “We properly staffed up [the matter mobility team] with people who had the training and the risk expertise to give that job the attention that it needed,” said Rhodes.
To further improve their risk management strategies, both Freshfields and Sheppard Mullin adopted centralized risk policies to ensure high-quality service for all their clients. Sheppard Mullin — which maintains a majority of its offices in the U.S. — applies U.S. rules when dealing with ethical conflicts, while Freshfields — one of the world’s largest international firms — mostly applies U.K. rules.
“The U.K. standard [for know-your-client (KYC) and anti-money-laundering (AML) due diligence] works for many jurisdictions,” explained Greenwald. The firm does, however, make exceptions for jurisdictions that have higher client due diligence requirements. “We apply those higher standards … [to] the five countries [we serve] that have higher requirements, but [use] a standard for everybody else,” she said.
Increasing Your Risk Team’s Scope of Work
Our Risk Staffing Survey shows that many risk teams have expanded their scope of work to support the efficacy of the risk-management function — and the Freshfields team is no exception. “We expanded the catalog of services that we provide, [including] doing more contract reviews, OCG reviews, and audit letters,” Greenwald said.
Although the risk team’s scope of work expanded, Freshfields thoughtfully distributed the work across the legal department’s four main verticals: Business Acceptance, Financial Crime and Sanctions, Practice Protection, and Commercial.
“Historically, data protection was handled by the Commercial Team,” Greenwald said. “They still handle a lot of that, but we now have a separate GPO given the importance of that realm and how much it’s growing.”
Sheppard Mullin similarly adjusted roles and responsibilities within its legal department, which consists of Conflicts and Business Intake, Docketing and Calendaring, Information Compliance, Claims and Prevention Advice, and an OGC Projects Paralegal function. One of the biggest adjustments, Rhodes revealed, occurred within the Conflicts and Business Intake Team.
“All of the conflicts analysis resolution was [previously] done by our conflicts lawyers; our partners were not clearing their own conflicts,” said Rhodes. But as the firm expanded, it outgrew this way of working. Sheppard Mullin hired senior conflicts analysts to triage this task, allowing intake lawyers to focus on conflicts resolution, due diligence, and overall risk management and evaluation.
Many firms are also updating the roles and responsibilities of general counsel related to the review of outside counsel guidelines [OCGs]. Block revealed: “As OCGs have gotten more comprehensive … general counsel is taking a larger role to really spearhead the review of outside counsel guidelines.” According to the Risk Staffing Survey, general counsel is involved with reviewing OCGs 80% of the time. Considering how quickly the volume and complexity of OCGs is growing, it’s extremely beneficial to have more professionals review these guidelines to ensure compliance.
Connecting Team Members Via Remote Technology
To promote stronger communication and collaboration across their growing and disperse teams, many firms have invested in remote technology. As shown in our Risk Staffing Survey, “60% of the small firms and 70 to 86% of the midsize, large, and enterprise firms indicated that a remote working platform was in place, and it enabled them to shift [to a remote workforce during the pandemic],” Block explained. “40 to 80% of the survey participants [varying by firm size] indicated positive changes in the work environment, and 50 to 90% of the interviewees indicated new projects.”
Investing in communication and collaboration tools is a key step for firms that want to improve their risk management strategies in a post-pandemic world. Video conferencing software, for example, greatly helped the Freshfields teams adjust to remote working, and even improved the ways they connect with clients. “It’s really helped to see the people that we’re serving, particularly [since we’re] an international firm,” said Greenwald. “It’s helped us build those relationships.”
In addition to meeting with clients, Greenwald’s team leverages video calls to check in with one another. “One of the things we instituted … was a daily check-in meeting,” explained Greenwald. “I want to make sure that the team is doing okay and that we’re sharing knowledge.”
Rhodes similarly has a weekly check-in meeting with her entire team to ensure everyone has the support and information they need. “We’ve also implemented a lateral associate integration program,” she said, which provides further support to remote associates who miss out on connecting with and learning from colleagues in the office.
Like Greenwald, Rhodes has found that remote technology better connects both staff and clients. “[We now have more] disperse people across the firm, so we have much more time zone coverage now,” she said. “[Virtual meetings and remote technology have] gotten the team more comfortable with decentralizing.”
Listen to the full webinar recording and download the full Intapp 2021 Risk Staffing Survey to learn more about improving your firm’s risk management strategies in a post-pandemic market.
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