Led by insurance broker Miller with The Lawyer, seven lawyers and risk advisers from UK Top 50 firms spent a morning discussing risk considerations during Covid-19 and the future of law post-lockdown. The virtual roundtable was hosted by the head of Miller’s UK professions team Ed Pickard and risk & compliance manager Nicola Anthony.
The discussion covered several issues, starting with financial crime in the time of Covid-19 – how firms are managing anti-money laundering (AML) and cyber resilience measures remotely. Pickard stated that Miller, which insures over 1,000 law firms, has seen an uptick in cyber incidents, with lockdown an obvious opportunity for cyber hackers and extortioners to attack while firms are vulnerable.
In the past, there have been a number of high-profile instances where firms have had their defences breached – under normal circumstances, the senior management team would come together in a boardroom and make decisions about how to unblock the system. With this option not available, do firms have plans in place to manage cyber events remotely and what changes have they made?
One lawyer explained that when management and IT cannot come together in a boardroom, you need to rely on people being on call – on the phone and on Microsoft Teams, through WhatsApp groups for cyber and business security, as well as through emergency communications services such as Everbridge.
“Cascading information relies on people picking up their phones straight away. Having been the person that has fought the floors during a cyber incident in an office, it’s not just a question of telling people not to turn their computer on – it was helping them plan for what is going to happen immediately.”
It is imperative that employees know when there has been a breach and are trained in how to react to it. As it can take 72 hours to notice, timing is essential. Though firms have most staff homeworking, it should not result in a relaxation of the security standards that would apply to homeworkers in normal circumstances.
Anthony highlighted the issues of AML and remote supervision as live risk areas, and then how to mitigate the risks involved. She referred to the SRA’s Draft Business Plan 20/21 published on 8 June, which detailed a view on expanding AML visits to all high-risk firms on a 3-year rolling basis.
“With everyone forced to work remotely very quickly, many firms have had to divert client resources away from their current processes in order to deal with all the issues that working remotely entails” Anthony said. “With the SRA increasing AML visits, can firms be confident and comfortable that they have done what they should have been doing over the last few months to comply with the regulations?”
The SRA along with all other AML supervisors are likely to under the spotlight from the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) to ensure compliance with the Regulations (The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017). Anthony explained that in order to mitigate this risk, firms can: 1) Go back over any matters that have been opened to ensure they are complying with processes, procedures and controls 2) Think about steps that have been taken if they have onboarded any clients, and document any rationales for taking on those clients or decisions made to decide not to act.
With many firms also moving to digital customer due diligence, there are concerns about whether the platforms available provide assurance. In March, The Financial Action Task Force (FATF) published guidance on digital ID and how to ensure it is reliable. There is nonetheless a clear warning.
“No virtual or online identification should take away from human judgment” Anthony said. “You need to take a risk-based approach throughout the process. . Criminals aren’t going anywhere, and law firms will always be a target. Keep staff alert to risks and warning signs.”
The group addressed remote supervision, which plays a pivotal role in compliance with AML, as well as the protection and wellbeing of staff and the reputation of the firm. One lawyer said that instead of using the word “supervision”, which has negative connotations, they use the term “oversight.”
A key, human pain point is the pressures staff have been under and the importance of recognising that lockdown hasn’t been a normal working from home situation.
“It’s just not a substitute for human interaction” argued one lawyer. “It’s an addition to a way of working, but it’s not a substitute that I would ever advocate.”
Human interaction was noted as requisite when recruiting lawyers. One lawyer raised the difficulties of integrating new hires into a team and imbuing them in the firm’s culture.
“I can’t get the same connection as when I interview a candidate face to face. We’ve continued to do business as usual remotely so successfully because lawyers have already made connections through physical interaction and developing trust. You can’t establish trust remotely.
Make sure you have clear induction and onboarding processes, such as buddy systems, so people feel welcome.”
Questions raised regarding supervision included how to include everyone in training and support (not just junior members of staff but those in managerial roles too), whether open door policies actually work, monitoring employees’ communications and making sure they are able to respond comfortably and adequately to emails and ensuring complaints are being managed.
One lawyer stated that his junior lawyers are finding it easier to contact partners and senior lawyers remotely, by organising team calls with them, rather than pinning them down in the office or when they are away at client meetings. Some of the group agreed that working from home was a tribulation for many younger lawyers, some of whom work from their bedrooms or have to supervise children while working.
As one lawyer pointed out, it is important to recognise all the dividing lines when planning; old v young, leaders v juniors, different types of work.
“There are some lawyers that can carry on doing advisory work from home forever, providing they have a comfortable set up. However, if you’re doing transactions, litigation or otherwise it’s much harder.”
An issue that businesses now have a greater appreciation of is mental health – the “next global pandemic.” Though firms have introduced measures to help people in lockdown through various supportive platforms, one lawyer anticipated a “tipping point” where some employees can return to the office while others must remain at home. There may be feelings of exclusion if half a team are together and the other half are isolated – for how long can it be kept up?
Pickard asked the group to consider how law firms will look in the future. The group was in agreement that most employees wanted to split their time between home and the office. Some with shorter office leases were looking at shrinking their space and imagined alternatives to a main HQ, such as smaller satellite hubs closer to where people live. One lawyer with a longer lease anticipated returning to the office as soon as possible and then taking things from there.
“Our policy is to do what we can to return to things as they were before lockdown. To get the best out of the practice of normal, the view of management is to get as many people to come back to office as soon as they can. It’s a somewhat reactionary, conservative, non-virtual approach.”
A representative from a firm that has been working virtually since they launched said that they had addressed the need for human interaction by creating a space in the office dedicated to socialising, business development opportunities and client events. They have local hubs, managed through WhatsApp groups, which lawyers can also use on a flexible basis, where they can share a secretary and paralegal. This, the delegate added, is valuable to younger lawyers who cannot afford to live in and commute to city centres.
“Covid-19 may shift the trend away from high-rise offices in London, with maximum capacity in lifts. Maybe the future for some offices will be low-rise hub buildings outside of city centres” a lawyer suggested.
“It’s an opportunity to build on the positives. We’ve been working from home for so long that habits have changed and people’s desire to work in offices has shifted. We couldn’t have forced this change through – it’s all come about because of this unusual situation.”
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