Skip to main content
Article | Risk Management Matters – Legal PI

Business continuity and operational resilience

Preparing for the easing of restrictions and beyond

Financial, Executive and Professional Risks (FINEX)
N/A

By Joanne Cracknell | May 14, 2021

How should law firms and employees prepare for a crisis?

It is fair to say that the events of March 2020 turned our everyday lives upside down and were unprecedented. As we have now reached the one year anniversary of the coronavirus pandemic (COVID-19), one thing the crisis has taught us is the importance of contingency planning and preparing for the unexpected.

The crisis brought the issue of contingency planning and operational resilience to the fore. Businesses over the last 12 months will have had to evaluate and enforce their business continuity programmes by adapting their operations, embracing new technology and becoming more agile in order to safeguard against the challenges caused by the pandemic. For some organisations, such programmes were being implemented for the first time.

Many firms will have adapted well to the challenges imposed by the pandemic, by adopting agile working technologies which not only minimised any disruption to the running of the business but enabled them to continue providing the proper standard of service to their clients, despite operating in unusual and challenging circumstances.

At the beginning of the outbreak the Solicitors Regulation Authority recognised the exceptional circumstances brought about by the pandemic and the challenges the profession might face. However, the regulator requires law firms to have appropriate contingency plans in place and to continue meeting the high standards expected by members of the public1.

Time for reflection

As we gradually emerge from the lockdown restrictions, it is possible that we will continue to experience a similar level of uncertainty and disruption for the remainder of 2021, especially as some countries in Europe have instigated new lockdown restrictions as the level of infection increases2. However, there is merit in using this time wisely to reflect and evaluate what worked well and what did not work so well over the last 12 months, and applying lessons learned to identify areas for improvement, further investment and/or resources. Taking this time will ensure law firms are in a stronger position going forward.

No one knows what is around the corner, but key decision makers will have some important strategic decisions to make about how the firm will operate going forward. It is unlikely that things will revert to pre COVID-19 days and the hybrid structure of office/ remote working is likely to remain and become the norm.

Looking forward

As with all contingency and operational resilience planning, the key is to understand and quantify the risks that may challenge not only the business and its employees, but also the services provided to clients.

Hindsight is a wonderful thing, but it never helps anyone. The reality is that we have to be ready for the unexpected.”3

Toby Harris | Baron Harris of Haringey, Member of House of Lords of the United Kingdom

By evaluating these risks and prioritising the continuity of business operations and safeguarding against those risks will assist law firms with being better prepared in an emergency, and enable them to recover and function as quickly and efficiently as possible.

Each law firm’s contingency and operational resilience planning process will be different. Senior management should fully understand and take into account the risks their businesses may face, depending on the size and nature of their firm and be able to anticipate future challenges.

During 2020 the UK economy suffered its worst annual growth on record, with UK GDP declining by 9.9%4.

Ineffective contingency planning may lead to operational failures and any significant disruption may result in a loss of revenue and clients and possibly reputational damage. All these factors may in turn result in financial instability. We have seen the impact COVID-19 has had on both the global and the United Kingdom (UK) economies. During 2020 the UK economy suffered its worst annual growth on record, with UK GDP declining by 9.9%4. However, with the vaccine roll out programme and restrictions being eased, UK economic recovery is imminent, but it is likely to be slow.

It is appreciated that contingency planning can be a timely and costly exercise and can often be overlooked and moved down the list of business priorities. However, what the last 12 months has shown us is that by not planning ahead, the consequences can be more time consuming and expensive.

However, it is crucial that senior management engage with this process as it is in their best interests that the business is operationally resilient. It adds confidence to clients and employees and can also help to attract new talent to the firm. It goes without saying - businesses that take contingency and operational resilience seriously do better than those that do not.

Contingency plans should be live working documents which are constantly reviewed and not just drafted and placed in a folder and forgotten about until disaster events occur. It is recommended that the plans are walked through and tested, using various risk scenarios and outcomes to ensure that the measures can respond to an event quickly, agilely and effectively. Even if it is simply a case of testing the IT system back up or checking the contact details for all members of staff.

Looking forward, law firms should be using the lessons learned from the previous months, at the same time as assessing the impact the pandemic has had on current budgets and future strategy. If not already done so, firms should be considering establishing a permanent operational/crisis management team, which can focus on developing procedures to ensure continued business operations, so the business is ready to deal with all future uncertainties.

The pandemic at some stage has tested people’s emotional wellbeing and therefore, emotional resilience should feature as part of a firm’s contingency and operational resilience planning. The morale, mental health and integrity of all staff and decision makers has an important role to play as part of the business continuity planning process and should feature as an agenda item at senior management meetings.

Summary

Law firms and their employees should understand what they need to do in a crisis. By having a dedicated team, robust and clear policies, controls and procedures and the provision of relevant training will help everyone know what to do and what steps to follow in the event of an incident. This will help law firms keep any disruption within the business to a minimum and prevent the risk of such incidents from occurring in the future. Having these measures in place will provide the regulator the evidence that firms are able to recover from such events and are capable of maintaining the proper standards of service expected by clients of the legal profession.

Footnotes

1 Solicitors Regulation Authority. (2021). Coronavirus What are we trying to do. Retrieved from the Solicitors Regulation Authority website: https://www.sra.org.uk/home/hot-topics/coronavirus/

2 BBC News. (2021). Covid: How are European countries tackling the pandemic? Retrieved from the BBC website: https://www.bbc.co.uk/news/explainers-53640249

3 Harris, T. (November, 18, 2020). Why we need a disaster planning committee to prepare for emergencies worse than coronavirus. Retrieved from The Telegraph website: https://www.telegraph.co.uk/news/2020/11/18/need-disaster-committee-prepare-emergencies-like-coronavirus/

4 Office for National Statistics. (2021). Understanding the UK economy. Retrieved from the Office for National Statistics website: https://www.ons.gov.uk/economy/nationalaccounts/articles/dashboardunderstandingtheuk
economy/2017-02-22

Author

Associate Director - Finex PI UK Legal Services

Related Capabilities

Contact Us