When it comes to instances of fraud, no sector is immune. The last 12 months has seen a plethora of reported cases hit the headlines, but this is only scratches the surface of the scale of the problem – many more go unreported. So, what can law firms do to better protect themselves, and their clients?
Figures released by KPMG show that fraud affects 1 in 4 businesses in the UK, with each case costing on average 5% of an organisation’s annual revenues and £1billion to the UK as a whole. While the number of reported cases has fallen, the cost of each incident is rising significantly. Indeed, the losses incurred by law firms over the last year due to fraud range from £100k to upwards of £1 million.
However, fraud doesn’t discriminate between the size of the business.
Fraud, on any scale, is bad for business. Not only does it negatively impact the bottom line, it can directly affect the perception and reputation of the firm itself. This in turn can also damage the pipeline of future business too, with potential- and some current- clients sometimes deterred to do business with a firm whose trust has been called into question.
One of the greatest challenges faced by organisations is the lack of resources available to law enforcement agencies. Technology is becoming increasingly sophisticated which in turn is making it easier for incidences to occur; fewer resources means fewer cases that can be investigated. As such, law firms need to take greater ownership of their fraud prevention strategy.
Many of these losses could be prevented and their impact on the bottom line minimised by law firms by taking matters into their own hands.
For instance, organisations with a Certified Fraud Examiner on board uncover instances of fraud 50% sooner than those who don’t, according to the Association of Certified Fraud Examiners.
Of course, this won’t eliminate the risk entirely. But it will lessen its impact on the organisation both from a financial and reputation perspective and law firms can mitigate the risk of fraud simply by having somebody within the organisation with the tools and skills to protect it.
For more information about the Certified Fraud Examiner Course, visit the website here.