Marielle van de Weijenberg, Managing Director of Aon Professional Services in Amsterdam discusses the inescapable need for Dutch firms to be serious about risk management.

“Risk management” is a popular catch-all term. In the past, the subject did not generate much enthusiasm from lawyers and notaries in the Netherlands. People would much rather be busy with clients and professional duties and distractions were not welcome.

But is something changing?

The Rise of the General Counsel and the Compliance Officer

When I joined Loyens & Loeff in 2015 as General Counsel/Risk Officer, I was told that I was the only person in continental Europe who had this role at a law firm. If I wanted to speak to peers, I had reach out to the UK, for example, where firms and managing partners had been working on professionalization in this area for years. This is even more true for U.S. firms.

A lot has changed in the past 10 years. Large international local firms were the first to put risk management prominently on the agenda, but medium-sized and smaller firms have now also realized its importance. General Counsels are now commonplace in larger firms and more and more people are active as “compliance officers” in smaller firms. The mandate of such officers is usually a lot broader than just compliance.

People have realized that attention to risk management is a must for a firm to be commercially attractive and relevant to professional clients.

Lawyer / Notary is Part of the Client’s “Supply Chain”

International listed companies are increasingly paying attention to the risks of their supply chain. This is due to new regulations, for example, in the field of ESG, but importantly it is also because they recognize the risks of reputational damage that can arise from a partner or supplier. The lawyer/notary is part of this supply chain.

This results in, among other things, extensive questionnaires that lawyers/notaries must complete to continue working for their clients. The questions range from the status of your cybersecurity to your diversity policy, from your anti-money laundering measures to ethical topics.

ESG is a new addition and ESG principles are being applied, whether voluntarily or not, by more and more companies.

In addition, the new NIS2 directive will have an impact. Among other things, it is intended to improve the security of supply chains and to control supplier relationships. This new directive will inevitably lead to stricter requirements imposed on lawyers and notaries by NIS2-compliant companies and institutions.

Lawyer / Notary as Employer

With the war for talent continuing for the time being, it is increasingly important to determine how you position yourself as an employer. The new generation of lawyers and notaries is considering this more than in the past, with the S of ESG playing an increasingly important role.

In other words: how do you support your colleagues in their life events (birth, illness, problematic finances, and disability and death)? How do you keep young people on board (flexibility, sabbaticals, financial fitness)?

Main Causes of Risks

A while ago we organized digital round tables on risk management and the subject of money laundering predominated. While interesting, this is only one aspect of risk management.

What risks are we talking about? Roughly speaking, you can distinguish the following “sources of risk”:

• risks arising from your clientele (for example: money laundering, bribery, engagement letters, claims and complaints)
• risks arising from your activities (for example: integrity risks, cyber risks, risks arising from financial processes, professional errors)
• risks arising from your place in society (for example: ethical risks)
• risks arising from hiring & firing of people (for example: good employment practices, but unfortunately also stealing clients, stealing know-how, privacy violations, IP infringements)

Set Your Sights and Act

Often professional service providers can be better at advising others than at making decisions for their own organization. Not everything can take precedence and you cannot improve everything.

So how do you determine your priorities in such a way that supports business strategy?

Think about what kind of clients you want to serve, which legal practices you want to concentrate in and what kind of employer you want to be. Then prioritize the risk management topics that support your strategy and speak about these with your clients.

You will also have to organize crisis management for your firm and guarantee that there have been lessons learned from previous crises. Do not be overly optimistic about your own organization and investigate and understand what is really happening within your office. Look at what companies in other professions are doing – this can give relevant insight that could be missed by only looking at your peers, who may be dealing with the same business blindness as you.

So, set your priorities, do not get bogged down in detail and roll up your sleeves!

This article is based upon and adapted from an article previously published in Dutch at Juristprofielbank.

Contact

The Professional Services Practice at Aon values your feedback. To discuss any of the topics raised in this article, please contact Marielle van de Weijenberg.

Marielle van de Weijenberg
Managing Director
Amsterdam