Professional Services

Client & transaction onboarding - preventing issues before they happen

Calum MacLean 27 March 2025

Dr Michael Mosley’s approach of tackling ‘just one thing’ to live a healthier life proved a huge hit. Adopting the same approach to improving the ‘health’ of your practice can pay similar dividends. Our ‘just one thing’, which if you really focussed on it, would radically improve a firm’s chances of a claims-free life is robust client and transaction onboarding processes.

Client and transaction onboarding is the foundation on which the rest of your matter-management is based. Your vetting processes determine which clients and what instructions are taken on, how they are scoped and priced, and how the matter is run. Risk prevention can’t get more fundamental than that. Here are our top tips.

STEP 1: EVALUATE & RECORD YOUR RISK APPETITE

Unless one person is the gatekeeper for all matters taken on in your firm, it’s worth having a formal risk appetite framework.
We recommend creating a traffic-lighted record of:

green – the ideal work types you want to take on;
amber – work which you may take on but requires senior sign-off and careful allocation;
red – work types you will not take on.

This should align with the skillsets and experience of your fee-earners, and those capable of supervising them.

Don’t fall into the trap of conflating ‘common’ for low-risk. Just because a residential property purchase involving a lender is common, does not automatically equate low risk. If you are uncertain about the areas of focus for your insurer then please speak with us.

STEP 2: INTEGRATE YOUR RISK APPETITE INTO YOUR RISK ASSESSMENTS

Risk assessments should go far beyond anti-money-laundering (AML) checks. From a claims perspective, AML is only one part of the equation.

Your risk assessment process should be a practical application of your risk appetite framework. If, for example, you have decided not to touch property purchases with Building Safety Act issues, your risk assessment should include relevant questions on that point. For example, ‘Does the transaction involve a relevant building for the purposes of the Building Safety Act?’. Better still, ask how many storeys the property is, or whether it’s higher than 11 metres (along with some brief guidance on how you would expect fee earners to answer those questions meaningfully).

STEP 3: CONSIDER CLIENT & MATTER RISKS SEPARATELY – ALBEIT NOT IN ISOLATION

While your risk assessment can take several forms, it should always include an assessment of client risk, as well as an evaluation of matter-specific risks. Do not assume that an existing client does not need to be risk assessed; circumstances change, as do the nature of the instructions. Equally, a sophisticated fraudster will use a straightforward instruction to ‘get in the door’ before trying to commit the fraud.

Client risk factors to consider (alongside your usual AML checks) include:

Does the age and profile of the apparent client ‘fit’ with the transaction?
Does the client face a language barrier? Are they ‘vulnerable’ in any way?
How experienced and ‘savvy’ do they appear to be?
Are they financially constrained? Is there a risk that they may not be able/willing to pay all your fee?
Are they clear about what they want you to do and the rationale behind their instructions?
Are you taking instructions through a third party?
Are there indications that they could be a difficult client?

Matter risk factors might include:

Impending time-limits or unrealistic deadlines.
Estimated ‘worst-case scenario’ claims cost (so you can assess the suitability of your PII arrangements).
Unusual or potentially complex matters.

You may want to include matter-area specific risk criteria for different types of work or departments. Miller can assist with this.

STEP 4: HARNESS THE OUTPUTS FROM YOUR RISK ASSESSMENT

Your risk assessment needs to be an integral part of the wider matter management process. The output from your risk assessment should help you ascertain which fee earners are suitable to undertake the work. It should also trigger enhanced review processes where appropriate – not only at the matter acceptance stage, but also for second-pair-of-eyes evaluations at critical junctures for high value and other high risk matters.

More than this, it should provide a central record of these cases. This is useful for management oversight, auditing purposes, and evidencing work risk profile to insurers and regulators alike.

Taken together, the above measures should help ensure that you are only taking on work that you have the expertise and capacity to manage, and that higher risk matters are getting the oversight required to minimise the risks of errors and omissions.

For more information contact [email protected].