We were delighted to sponsor the Law Society of Scotland Annual Conference again in 2021. This year, for obvious reasons, the event was held virtually, and appears to have been a great success. The sessions we attended were very well attended by solicitors from far and wide. Perhaps many of those same people wouldn’t have been able to justify the time away from their office and travel expense to attend a “live“ event, but that’s a topic for another day!
One of the sessions I found particularly interesting was the Risk Management session chaired by Matthew Thomson of Lockton.
I found it interesting to hear that in the last five years the number of intimations against the Master Policy (the Professional Indemnity Insurance policy for the Scottish profession collectively) has fallen from around 900 claims to about half of that. There have also been far less high value claims (classed as those valued at over £1 million). It is also worth noting, in contrast, that claims against property professionals, accountants and other professional services providers are currently rising. Solicitors are (positively) bucking the trend!
It is hoped that one of the reasons for this drop in claims against solicitors is a greater emphasis from law firms on risk management. I also think that the use of technology and improved systems and processes, will also have contributed.
The question was raised during the session as to whether fraud has increased during the pandemic?
The answer from the panel was that it has undoubtedly been on the rise, with the use of email posing the greatest risk. This struck a particular chord with me in that one of the biggest developments at Cashroom in recent years has been building our Cashroom Portal technology. At its core it is the means of communication between us and our clients, specifically to get away from the insecurities of email. The portal is a secure and encrypted means of communication. With two factor authentication built in, it ensures the greatest level of practical security is applied, thereby minimising fraud risk.
As we now provide services to just shy of 10% of Scottish law firms, we would like to believe that we contribute in some way to the reduced risk overall.
The other risk that was highlighted by the panel was that cross-checking and verifying things like bank details being more difficult to do when staff are working remotely. Again, this is something that our Cashroom Portal and its’ integrated open banking technology helps to minimise significantly. In fact, in our experience, many in-house Cashiers and finance staff do not even follow a process of checking or verifying bank details, often they are simply authorised to set up and make payments themselves. This process, and its’ inherent single point of failure, compromises security.
Again, use of Cashroom services ensures that there is no such single point of failure, and all details are cross-checked and verified, minimising the possibility of human error.
The closing remark from the panel was that often errors made, and claims arising from them, lag behind the event by quite some time. It may be that there are in fact an increased number of claims against the master policy through the pandemic, but we will have to wait and see. We, as a business working in this space, are confident that the profession is constantly gaining awareness on fraud and risk issues, but as ever, cyber criminals and fraudsters are always looking to the next opportunity, and they thrive on change. So, if you are planning to bring your staff back into the office in the near future, beware that any change such as this provides uncertainty, changes of process, change of log in details etc etc.
So please be alert to any unusual activities, telephone calls or emails sent to you or your staff, and re-deliver your cyber, fraud and anti-money laundering training to all staff as a priority.
By doing so, and working together as a profession, solicitors have an opportunity to learn from each other, share information, and create tighter security that discourages fraudsters and criminals.