Reduce your firm’s professional indemnity risk

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Professional Indemnity Insurance (PII) is required by every law firm in Australia. As such, many firms simply set their premium and expect it to increase every year.

Yet, since 2002, PII claims have been declining in NSW with 2014/15 recording the lowest level in 13 years.

This decline has seen a drop in PII premiums in 2016 – a significant rebate was  paid to NSW policyholders and QLS announced a significant reduction to levies.

We’ve seen many firms take a number of steps to actively reduce their risk of a PII claim – in turn, lowering premiums. Here’s what you can learn from them.


First, identify common risk factors

Be clear on who your client is

This ensures there are no conflicts in your transactions and is particularly critical where family is involved. Lawyers should explain that they aren’t acting for other family members and record it in a file note.

Know your client

With an increase in identity fraud, it’s imperative to record a file note with your client’s full name, date of birth, address, and identification.

Avoid inadvertent legal advice

Make sure that off-hand responses aren’t unintentionally construed as legal advice – particularly on social media. When providing information, make sure people know it isn’t legal advice.

Maintain proper file notes

Documenting all communication protects you, provides clarity and acts as an audit trail. Detailed file notes and client advice should be given in writing and signed off by clients. Finally, be cautious of hidden risks in file transfers from other solicitors – ensure you’ve fully read the file before you commit.

Then, simplify processes with technology

While all these steps seem relatively simple, the risks are often displaced from the actions – notes taken today may not be needed for years.

Technology reinforces claim prevention behaviours, yet is often overlooked. The following steps leverage your practice management system.

  1. Mobility
    It is important to capture detailed file notes at all times, particularly if your staff are out of the office. Mobility platforms that integrate with your practice management system can streamline this process.

  2. Centralised data
    Storing client information in a well-structured directory ensures you can streamline  office efficiencies, particularly if a lawyer leaves the office. By organising all correspondence and related activity against a matter, anyone can easily pick up the matter.

  3. Use less paper
    Paper documents are inherently less secure than digital files. Your practice management system should be able to streamline the saving and importing of all client documents to digital files.

  4. Data ownership
    If your practice management system is in the cloud, you should ensure you have direct ownership of your data and can extract client documents in bulk (which many systems do not allow). Finally, know the difference between public and private hosted server solutions.

  5. Workflow Practices
    Good practice management systems will present staff with automated task lists, ensuring they undertake common processes consistently. This means they rely less on senior colleagues for guidance, improving productivity and reducing errors across your firm.

 

Reduced risk = increased efficiency = reduced premiums

These steps should reduce your risk of claims, premium costs and other costs not covered by PII policies (should a claim be successful) and also help you run a more efficient and profitable firm.

If you’d like to learn more about how FilePro can assist your firm, contact us or visit our website