Over the last 12months I’ve been asking business owners, like yourself, to complete a business assessment that my team and I have designed. Curious to understand where the common hurdles exist, the assessment presents a set of questions that stem from the key areas required to achieve a benchmark business.
When we look at the assessment results, what’s glaringly evident is that most business owners (i.e., 60-70% of them) don’t have a risk management plan in place. And only 6% claim they manage risk within their business, extremely well. I’m talking – proactively being on the front foot with a strategy to mitigate instances such as a cyber-attack, repercussions of a key employee leaving or poor communication that creates disgruntled clients. All of which pose a threat to the business, not only financially, but to its ongoing reputation.
To better understand the underlying causes of the most common insurance claims in Victoria, I had the privilege of speaking with Stephen Bubb of Legal Insurance Agency – Legal Practitioners’ Liability Committee (LPLC)
Stephen keenly points out that you can’t “insurance away” your exposure areas and preventing claims in the first place through good business management should be the starting point. Yes, insurance can help resolve the financial consequences of a claim being made against you, but it doesn’t avoid the claim altogether. It’s not a panacea.
Having insurance doesn’t:
- reduce the likelihood of a problem arising
- deal with the impact it will have on your client and your reputation avoid the stress and worry that comes with a claim
- reduce the time, effort and resources required to manage a claim.
That being said, the poor take-up of having a risk management plan makes me challenge the validity of the title itself. I feel it presents like a burden and therefore just gets left in our “too hard basket” as we justify to ourselves, “I simply don’t have time”.
But, what if instead of trying to fear-monger you into developing a risk management plan, I reframed my request to instead encourage you to create a plan to consistently do quality work?’ Yes, a plan for your business that aims to provide quality work and a quality experience for your clients. For every job. Every time.
Stephen Bubb and I agree, if you follow a strategic planning process to deliver quality, you’ll naturally integrate risk management principles, at least from a professional indemnity lens. Then, not only are you more likely to reduce your risk exposure, you’re also more likely to have a thriving business. Isn’t it so much more motivating to strive for a goal that excites us?
So, where should you start?
Here are Stephen Bubb’s five fundamentals to help you produce “quality” in your work.
#1 – Quality Relationships; with your clients and your team
Rather than saying ‘yes’ to everyone who needs your services, go narrow and identify your ideal client profile. I.e., people you want to help and the type of work you want to help them with. It’s also important to establish a clear contract of what’s going to happen; scoping and then managing the work you’re going to do for your client. While also outlining things that you’re not going to do, i.e., exclusions.
#2 – Quality Knowledge; have the right knowledge to do the work well
Problems often arise when you take on work that you don’t do regularly. For example, if you’re in the legal industry you might handle domestic commercial agreements, but you’ve just taken on a job where the purchaser is a foreigner and therefor triggers additional duty that you weren’t aware of.
It’s certainly challenging to stay on top of evolution in legislation, i.e., the knowledge required to deliver quality (and accurate) advice – particularly when your business spreads it’s time and resources too thinly, offering every area of law. Stephens recommendation, particularly if you’re a small business, is to be an expert; and niche in one or a few key service areas.
#3 – Quality Communication; with your clients and your team
Being clear is kind. But it’s not always that simple. We encounter difference in language, differences in cultural interpretations, geographical barriers, and many of us battle internally with being strong delegators and supervisors. If you can communicate advice and instructions in a way that your clients and team understand; then you’ll lower the risk of a problem arising.
#4 – Avoid Simple oversight
Stephen hears it all the time; “I knew what to do, I was just too busy.” Whether it’s; you don’t see an email; you miss a date or key deadline; or you failed to register a document. You are human, but you can’t put in your defence claim, “Sorry, I was too busy at my son’s graduation.” However, you can embed a review process and nominate accountability (i.e., another pair of eyes) for picking up accuracy of detail.
#5 – Keep Records
It’s simple. Keep records of your recommendations, advice; detail that you’ve discussed. All so you have evidence to prove you did as you said.
This article was originally published in the Law Institute Journal, as a part of the Leaders in Practice program – a collaboration between SEIVA and the Law Institute of Victoria. Learn more about Leaders in Practice here.