Thursday, 1 September 2016

Should Insurers and Lenders be Demanding guardrails?

Left to our own devices, most of us get attracted to things that are bad for us. I am in my mid-40s and trying to improve my general health and fitness, yet I often find myself making short-term decisions such as eating a bar of chocolate or having an extra beer. ‘The diet and fitness regime can always start next week’.
We all get caught up by temptations and falling into a short-term trap.
Over the last 20 years I have witnessed many in the conveyancing industry knowingly sacrifice proper risk management in pursuit of making legal work fractionally cheaper for the client or indeed their firm.
We know that that drinks pumped full of sugar are bad for us but it is likely to take a sugar tax to have a big impact in the same way that the plastic bag tax has.
Guardrails seem like an unwanted intrusion on personal freedom. Until we get used to them. Then we wonder how we coped without them.
In the most risk-laden work law firms undertake, conveyancing,’guard rails’ such as lawyer checker, Jet, COMPLETIONmonitor and Safemove exist, yet many firms fail to use those services even though few lawyers would ever deny that they have a crucial role to play when managing risk. After all,  each move to reduce risk in conveyancing has costs either in time or money and sometimes both.

It is wrong to think that we are all always rational, have complete access to the information we need, have plenty of time and never make errors. If all that were true, PI insurance would be a lot cheaper - and lenders would not need to constantly prune their panels.
Instead, lawyers with some degree of humility understand that sometimes they can make errors and that cultural guardrails such as intelligent checklists not only help us avoid mistakes, but give us the reinforcements we need to get back to productive work and ultimately a healthier business.
Even more rationally, the small amounts of time saved by not investing in risk prevention are enormously outweighed by the costs of making mistakes. Just think: inflated PI premiums, barrister fees, reputation damage or going out of business .
As one of the architects behind a conveyancing risk management tool I do have a vested interest in arguing that law firms should use ‘guardrails’. Does that mean I am wrong though?

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