The Risks Of Recession

A recession imposes unique pressures upon professionals, including solicitors' firms. The professionals' response to this pressure gives rise to the risk of negligence and good risk management can therefore be crucial.

There are at least three sources of pressure in recessionary times, mainly relating to the need to preserve profitability and which can prompt problematic behaviours by solicitors' firms. They are: (1) pressures from within the firm; (2) pressures from clients; and (3) pressures from regulators.

Pressures from within the firm

Suing for fees is a classic risk management problem which solicitors bring upon themselves. Clients who are going through difficult times can often be unreasonably tardy in paying fees. However, due to pressures on firms' finance departments to recover unpaid fees, often there is insufficient thought before issuing proceedings, and perhaps without reference to the fee earners involved in the matter in question, which can