Many law firms anticipated a rise in overall claims during the pandemic, due to lockdowns and remote work. That trend has yet to emerge for many of them, but here has been an increase in regulatory investigations.

At Travelers, dispute resolution claims account for the majority of our notifications – although the numbers are falling in totality. Claims from commercial and corporate work accounts for the second largest number of notifications, with the number of notifications increasing.

Retainer management and drafting are the most common cause of errors. Such failures are often due to distraction, caused by fatigue, stress and work pressures; advice failure is often due to a lack of guidance from colleagues when forming a judgment.

These trends could potentially be a exacerbated by remote and hybrid working.

While we’re seeing a need for greater flexibility in how and where work is completed (many employees and prospective employees are demanding it as a condition of employment) it will take some time for firms to settle on a structure that provides flexibility, while protecting culture and limiting risk.

Stopping the blame game

Clare Hughes-Williams, partner at DAC Beachcroft, has seen a range of cases where remote work has added to day-to-day problems.

For example, regulatory investigations have resulted from issues ranging from ill-judged emails that caused offence, to a person’s failure to check documents that partners were asked to sign.

Current work structures, in which it’s more common for colleagues to work in isolation from each other and for junior lawyers to have less face-to-face learning opportunities, increase the risk that errors like this might be covered up. These cover-ups could lead to more significant problems down the line.

This is where having a “no-blame” culture, and a vigilant risk team, becomes more important than ever. To avoid problems that can result from mistakes on the job, junior lawyers must be able to trust that it’s far better to bring an error to the attention of their supervisor than it is to try and mask it.

Hughes-Williams said there has been a direct link between young solicitors working at home without the ability to turn to a senior colleague for guidance and an uptick in mistakes that have had potentially serious regulatory ramifications. In some cases, they have been able to persuade the Solicitors Regulation Authority (SRA) to take a more understanding approach, on the basis that their own enforcement policy does state that it is not the role of the regulator to punish innocent mistakes.

Jon Hyde, partner at Beale & Co, observed that remote working can also lead to an increased risk of cyber fraud for firms. He has defended claims against major firms arising from employees mistakenly transferring substantial sums to third parties.

When the majority of business is carried out remotely, sophisticated hackers can potentially benefit from hijacking client email addresses or tricking employees into downloading malicious software, to gain access to client funds.

Reinventing culture

While the intention of continuing flexible and hybrid work was to give employees a better work / life balance, it has led to burnout for many as the boundaries between the two have become hazier. Meetings can be arranged in moments on platforms such as Microsoft Teams and Zoom, leading clients to expect a much quicker turn-around.

The pressures of legal work, paired with the lack of colleague support within arm’s reach, can make the profession feel overwhelming and isolating – particularly for young solicitors.

Jon Hyde noted that junior solicitors may feel particularly vulnerable to regulatory sanction, as the SRA has often taken a strong line against them; perhaps the recent re-admission of Claire Matthews to the Roll – initially struck off for losing client files and then lying about it – may reassure them somewhat.

It’s more important than ever for firms to look after mental health and to embed wellbeing into their culture. Ensure senior lawyers are accessible, appoint mental health first aiders to offer support or hold town hall meetings where senior management can provide updates and celebrate individual and team successes.

Embracing fun and life outside of work can help too; the DAC Beachcroft intranet has a Pets@DACB page where the senior partner’s cat makes regular appearances. While it sounds like a small thing, it’s the sort of effort that can bring a smile to someone’s face.

The challenge for law firms is to refine their workplace structures and cultures in ways that are good for both the business and for employees.

As Katie Heiden, a claims advocate at Lockton, told me, creating the conditions for the business to thrive is a two-way process. Employers need to respond to employee needs, and vice versa.

Though the traditional balance of power has shifted somewhat from the employer towards the employee, we all hope that it’s creating more inclusive, risk-aware and risk-mature workplaces. That would be good for all of us.