The risks facing the modern law firm can look almost insurmountable at times – the combination of Brexit, rapidly evolving technology and new entrants into the market which are offering competitive legal solutions can make it look like the challenges require wholescale transformation.
Of course, some of the perceived risks in the market will require law firms to evolve, but this should be seen as a positive – an opportunity to develop and grow. A lack of risks in the market also means it becomes stagnant and there is less of an imperative to push things forward.
However, to properly deal with some of the latest risks facing law firms, proper time and investment is needed. One of the biggest challenges facing law firms in recent years is the rise of cybercrime including phishing and the dreaded ‘Friday afternoon fraud’. The latter, so-called because fraudsters often strike on a Friday afternoon, when the majority of conveyancing transactions are completed, convinces lawyers to transfer funds to fake accounts. It’s not just conveyancing firms however which are at risk – The Law Society reported earlier this year that 52% of firms reported detected cyber-attacks, with phishing emails, spoofing and viruses the top three threats.
Failure to deal with these sorts of threat could have untold consequences for law firms, as client money could be lost and important data compromised, not to mention the reputational damage a high-profile cyber-attack can wreak on a firm. Investing in software to ensure client data is securely stored, as well as very comprehensive IT audits are a good start. However, a strong IT team is only the first line of defence – regular and wide-ranging training for all members of staff is also very important so they recognise the risks and what not to do.
This is not a one-off investment either– these fraudsters are constantly evolving their scams and embracing new technology to try and stay one step ahead of law firms and their lines of security. But for many law firms in this modern market, a tight cash flow can really impede their ability to rapidly adapt their business to adequately deal with risks such as cyber-attacks. We have seen more firms approaching companies like ours in order to utilise a funding solution to provide much-needed financial stability and release cash so they’re in a much stronger position to deal with day-to-day challenges such as cyber-attacks. Our range of products allow law firms to release cash tied up in long-running cases to invest back into the business when it’s really needed – when something like a cyber-attack is threatened, there’s certainly no time to lose and a funding solution enables firms to be fleet of foot and respond quickly and effectively.
The risks facing law firms may seem overwhelming at times, but with the right funding product in place, we’ve seen more firms well-equipped to not just tackle these risks, but turn them into opportunities.
MODERN LAW MAGAZINE Issue #43