Risk Management for Professional Services

www.hanrickcurran.com.au

Risk Managementfor Professional Services

March 2017

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An introduction to the fundamental concept

Basics of Risk Management

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Source: Queensland State Archives, Customs House, c. October 1926


Definitions for risk management are drawn from a number of different sources, but commonly are drawn from international standards.

Definitions for risk management


Risk defined (Macquarie)

1. exposure to the chance of injury or loss; a hazard or dangerous chance

2. to expose to the chance of injury or loss, or hazard

Source: The Macquarie Dictionary


International Standard

Risk is the effect of uncertainty on objectives

Source: ISO 31000:2009Source: ISO Guide 73:2009


ISO Guide 73:2009

Definitions and vocabulary set out in the guide that accompanies the standards



Where risk standards are defined

Source: Standards Australia, www.standards.org.au

http://www.standards.org.au/


Where risk standards are defined

Source: www.infostore.saiglobal.com and www.iso.org

http://www.infostore.saiglobal.com/

http://www.iso.org/


Risk Management Relationships

Source: ISO 31000:2009


Risk Management Process

Identification

Analysis

Evaluation

Treatment

Monitoring


Source: www.coso.org

http://www.coso.org/


Hanrick Curran’s journey into risk management commenced long ago but become more formal as the Firm responded to legislative and professional changes

The Risk Management Journey


CLERP 9

Source: www.legislation.gov.au

http://www.legislation.gov.au/


Audit partnership goes corporate


APES 325

Preceded by ASQC1 about quality control for audit firms

Mandates risk management frameworks for accounting practices

Source: www.apesb.org.au

http://www.apesb.org.au/



CAANZ support

Source: Chartered Accountants Australian & New Zealand


Source: www.qls.com.au

http://www.qls.com.au/


Establishing a Risk Management System (RMS).

Risk identification, assessment and mitigation.

Establishment of a RMS


Place in the Firm

Source: Westpac Corporate Governance Statement



Committee Membership

Practice manager

HR

Partners


Meeting schedule

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

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Primary purpose of the Committee

Ensuring clients get looked after

Protecting the partners investments

Monitoring

OversightAdvice


Managing professionals


David Maister“Are Law Firms manageable?”

Source: www.davidmaister.com

http://www.davidmaister.com/


How wrong can it go?

Source: ABC Learning Centres Ltd, 2007


Establishing the risk register

Context

Identification

AssessmentResponse

Monitoring


Risk categories

Business

Regulatory

Technology

HR

Governance

Stakeholders

Financial


Risk Management Register

Source: Hanrick Curran Risk Register


Risk management systems


Professional Risk



International Standard

Risk is the effect of uncertainty on objectives



Professional Risk



Assessment criteria


Professional Risk



Professional Risk



Professional Risk



Residual risk ratings


Professional Risk



Risk response options



Professional Risk



Other risks

Data security

Office disasters / office damage

Social media fails

WHS issues

Failure of key clients / projects


Benefits of risk management

Benefits Disadvantages


When do you need to start this?

$2 million in revenue?



“Consider a phased approach to implementing a risk management system …

2 partners?

5 partners?

10 partners?


Source: www.qls.com.au

What are the alternatives?

“Working on the practice, not in the practice …

http://www.qls.com.au/


The process of establishing the ‘rules of engagement’ for clients, for setting expectations and agreeing what services we have been hired to provide.

Client Engagement


Professional requirements

APES 110 Code of Ethics for Professional Accountants

APES 305 Terms of Engagement

ASA 210 Agreeing the Terms of Audit Engagements

Source: www.apesb.org.au and www.auasb.gov.au

http://www.apesb.org.au/

http://www.auasb.gov.au/


LPA requirements for client engagement

Source: Legal Profession Act 2007


Client engagement

Source: “Karma Business” by Mike Keene and “The Trusted Advisor” by David Maister

Share

Refine

Propose

Deliver

Engage

Listen

Frame

Envision

Commitment


Terms & Conditions

Source: Hanrick Curran standard terms and conditions (version 7, November 2016)


Terms & Conditions



Terms & Conditions



Problems

Non-conformance

Client expectation

gap

Staff/Partner obstinacy

System complexity

Changing legal

requirements


Some personal insights into a professional career, with some tips for survival.

Managing pressure & expectations


Asset structuring

Of course …

“Who do you trust more, your partners or your wife?”


The speed of email …



Source: http://www.qls.com.au/For_the_profession/Love_Law_Live_Life

http://www.qls.com.au/For_the_profession/Love_Law_Live_Life


Source: www.headsup.org.au



Email notifications, set to off



Kaizen

Source: David Allen & Stephen Covey


Audit team reading list

Source: Hanrick Curran audit team reading list


Summary …

Risk is dealing with uncertainty and its impact on objectives.

A risk management system can serve as a catalyst to formalising certain management systems.

You can start dealing with risk by simply putting the matter on the agenda for the next partners meeting.

The benefits of looking at, and thinking about, risk outweigh the loss of time involved.

It does make sense to document the issues that you are looking at.

Start by using some of the Law Society resources to identify areas for improvement.


We welcome your questions regarding the contents of our presentation and the issues associated with risk management.

An opportunity for questions


Matthew’s details

Source: LinkedIn

Matthew chairs the HC Risk Management Committee, with a focus on ensuring that HC is managing the risks attendant with the operations of the Firm.

Thank you

www.hanrickcurran.com.au

Hanrick Currant. (07) 3218 3900f. (07) 3218 3901e. [email protected]

Level 11307 Queen StreetBrisbane Qld 4000

GPO Box 2268Brisbane Qld 4001


Definitions from ISO 31000:2009

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