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Risk management is an essential aspect of legal practice. The Malaysia legal industry provides many opportunities for law firms to address client needs and make profit. However, the opportunities come with many risks which pose a lot of challenges especially to the small and medium sized law firms. These risks spring from the dynamic business environment under which these firms operate Malaysian legal system is a product of more that one jurisdiction. While it is based majorly on English Law, there are various aspects that originated from India and Australia. Apart from these foreign jurisdictions, the system is also influenced by Islamic and Common Law. This complex legal environment requires individual lawyers and law firms to have a thorough understanding of the people they represent and how to handle various cases. Most lawyers and firms find this situation both risky and challenging.
Law firms like any other organizations have to abide by every government regulation regardless of their ability to regulate themselves. Malaysian Law explicitly applies to its legal firms outlining the codes of practice, duties and obligations. These checks and balances put a limit on what the firms can achieve.
The demands posed by clients have become a source of risk and challenge to upcoming law firms. Clients have become more concerned about confidentiality of the information they entrust the lawyers with and the quality of care they get during counsel. There is a tendency for lawyers to ignore external calls for compliance due to the notion that they are already bound by their duty and oath and therefore do not need any censorship. There has been a general feeling that risk management should be left in the hands of individual firms based on their levels of tolerance. But these individual preferences have opened a leeway to accidents which lawyers and firms have not been able to cope with.
Changes in information technology have exposed many unwary legal practitioners to mistakes and accidents which weigh heavily on clients, individual lawyers, law firms and the entire industry. Access to confidential information by legal practitioners and outsiders has become a reality within legal circles. Exposure and access to such information is a risk that most customers are not able to withstand. It actually lowers the reputation of the profession. In the past, law firms needed little ethical guidance because legal information was strictly presented in hard copy. The introduction of electronic information calls for more precautions from lawyers who can no longer discern the best way to carry out their professional obligations.
Law firms face additional risks with regard to confidentiality and compliance especially when managing documents, handling records and enterprise search. The software tools that support most of these functions are designed to simplify information access and lightened back-office administrative tasks within law firms. Information therefore becomes available for sharing and reuse; benefiting clients and layers. However, easy and open access to confidential client information is quite challenging and risky in a legal environment.
Since a changing environment seems to be the major factor that contributes to law firm risks, it is important for the managers of these firms to learn how to find opportunities in every new situation brought by such changes.
Law firms like any other organizations have to abide by every government regulation regardless of their ability to regulate themselves. Malaysian Law explicitly applies to its legal firms outlining the codes of practice, duties and obligations. These checks and balances put a limit on what the firms can achieve.
The demands posed by clients have become a source of risk and challenge to upcoming law firms. Clients have become more concerned about confidentiality of the information they entrust the lawyers with and the quality of care they get during counsel. There is a tendency for lawyers to ignore external calls for compliance due to the notion that they are already bound by their duty and oath and therefore do not need any censorship. There has been a general feeling that risk management should be left in the hands of individual firms based on their levels of tolerance. But these individual preferences have opened a leeway to accidents which lawyers and firms have not been able to cope with.
Changes in information technology have exposed many unwary legal practitioners to mistakes and accidents which weigh heavily on clients, individual lawyers, law firms and the entire industry. Access to confidential information by legal practitioners and outsiders has become a reality within legal circles. Exposure and access to such information is a risk that most customers are not able to withstand. It actually lowers the reputation of the profession. In the past, law firms needed little ethical guidance because legal information was strictly presented in hard copy. The introduction of electronic information calls for more precautions from lawyers who can no longer discern the best way to carry out their professional obligations.
Law firms face additional risks with regard to confidentiality and compliance especially when managing documents, handling records and enterprise search. The software tools that support most of these functions are designed to simplify information access and lightened back-office administrative tasks within law firms. Information therefore becomes available for sharing and reuse; benefiting clients and layers. However, easy and open access to confidential client information is quite challenging and risky in a legal environment.
Since a changing environment seems to be the major factor that contributes to law firm risks, it is important for the managers of these firms to learn how to find opportunities in every new situation brought by such changes.
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