When it comes to risk assessment, many professionals are dissatisfied with their firms’ processes. Lawyers and other legal professionals must often work with inconsistent standards, manually score engagements, and collect vast quantities of information from multiple sources — all of which leave them overwhelmed and overworked. During the 2021 Legal Society AML and Financial Crime Online Conference, Daragh McLaughlin, Practice Group Leader for Risk and Compliance at Intapp, led an expert panel discussing how to overcome these challenges during the “Automation of Risk and Third-Party Data” session.
McLaughlin spoke with Sam Suri, Director at Silver Badge Consulting, about how firms can leverage technology and data to improve their risk assessment process. Session attendees also got to hear from Muriel Marseille, Director of Risk and Compliance at Ashurst, about the firm’s own risk assessment system, and watched McLaughlin demonstrate OnePlace Risk & Compliance, the Intapp cloud-based solution purpose-built for compliance and risk management professionals.
Reevaluating the Risk Assessment Process
Suri began her presentation by exploring recent risk assessment trends within large law firms. Historically, firms combined the assessment of clients, matters, and other related aspects into a single process. “What we’re seeing now is a much more structured, separate approach,” revealed Suri. “Client risk assessments are undertaken separately to matter risk assessments. They’re treated and assessed independently, with each of them being given their own classifications.”
Suri added that, in addition to changing the structure of risk assessment, firms are also changing and increasing the scope of the risk assessment process. Instead of focusing on anti-money-laundering (AML) risk assessment, many firms now examine all possible risks of a client or matter, including client type and the financial history of clients.
“More firms are now hooking their risk assessment processes into their client matter intake processes,” said Suri. By combining these once-siloed workflows, professionals can more easily access and leverage client data when assessing risk.
Due to the growing complexity of risk assessment standards and processes, Suri advised firm leaders to invest in risk and compliance technology, which can help professionals track a wide range of information, from client history to practice groups within the firm.
“Technology and data — both internal and external third-party data — can be used to support the risk assessment process, make that process more efficient and consistent, and improve data quality,” said Suri. “We urge firms to use technology to capture and structure the data that’s being collated as part of the risk assessment [so it can be used] for wider firm purposes.”
Compliance and risk management tools can also ensure consistency throughout the risk assessment process. Suri explained that although global firms often define standard global risk assessment processes, outlying offices may have different or additional assessment requirements. Manually determining whether various geographies can take on potential matters is time-consuming and could inadvertently result in issues caused by human error. Using risk and compliance technology, on the other hand, saves professionals time and effort by automatically reassessing clients based on all appropriate standards.
As Suri reminded the attendees, risk and compliance systems are ultimately just tools. Although technology can certainly help score and assess clients and matters, it’s ultimately up to professionals to use their best judgement and determine whether to take on an engagement.
Harnessing Technology for Risk Assessment
Ashurst was one of the first firms to use risk and compliance technology to support its risk assessment process. Firm leaders realized that the market was evolving and that they would need to find a way of supporting their teams to keep up with these changes.
“There was a business demand of more for less: more efficiency, less cost,” explained Marseilles. “The marketplace was also going through a digitization process,” she added, pointing out that there is currently a 12.7% annual increase in digital transactions.
To improve the efficiency of the firm’s risk assessment process and lead Ashurst along its own digital transformation journey, the firm decided to build a risk assessment system. This decision to invest in a better compliance and risk management tool is one that Marseille hopes other firms will likewise consider.
“There are risk assessment tasks that are extremely repetitive and time-consuming,” Marseilles said. “It’s important to ensure that your professionals are working as efficiently as possible, and if a digital worker can do that job nonstop, it will have a significant impact. It will ensure that your teams can talk to one another and discuss matters properly.”
When building the firm’s risk and compliance system, Ashurst leaders kept the following factors in mind:
- Creating a standard global risk assessment process
- Ensuring consistent, continuous matter monitoring
- Aligning the system with firm processes, the operating model, and the needs of all teams
- Providing visibility to teams via reporting
To meet these goals, Ashurst leaders focused on improving the risk assessment system’s capabilities around task automation, work management, reporting and analytics, and audit, inspection, and file review. Marseille encouraged other firms to do the same when building or investing in their compliance and risk management tools, and stressed the need for firm leaders to speak with all teams to ensure the technology meets everyone’s needs, is securely built, and can successfully integrate relevant third-party data.
Investing in OnePlace Risk & Compliance
Firms that wish to invest in a purpose-built risk assessment tool rather than build their own should consider implementing OnePlace Risk & Compliance. This Intapp suite helps professionals easily evaluate and monitor engagements while also mitigating risk and improving conflicts clearance. The cloud-based solution also utilizes AI, machine learning, and predictive analytics to further increase efficiency and profitability within your firm.
McLaughlin demonstrated the software during the session, explaining how users can view important information — including specific tasks, AML scores, and request status — on their dashboards. Firms can also provide users with access to view third-party data and learn more about a client’s corporate tree, management, subsidiaries, and shareholders.
McLaughlin went on to explain how users can create multiple workflows to meet their firms’ needs. “The workflow process is configurable around specific firms’ requirements,” McLaughlin said. “If you have access rights, you can amend these workflows and add states, decisions, and notifications.” Users can also configure the workflow forms — and optimize them over time as needed — by adding, editing, or reordering questions, ensuring that their firms collect the data they need.
Like Suri, McLaughlin discussed the need for professionals to exercise their own judgement during the risk assessment process. He shared how OnePlace Risk & Compliance lets certain users manually adjust an engagement’s risk-factor level if they feel a client or matter is worth taking on, even if the software determines it’s a high-risk engagement. Users can explain their reasoning within the software before submitting it to the appropriate manager or partner, and can also add or request more information about the client or matter.
Watch the full session recording to learn more about improving your firm’s risk assessment process with OnePlace Risk & Compliance.
Schedule a demo and see how OnePlace Risk & Compliance can help you turn risk and compliance management into a competitive advantage.
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