This document outlines the basics of risk management for professional services firms. It discusses definitions of risk from international standards and dictionaries. The document then covers Hanrick Curran's journey in establishing a risk management system in response to legislative and professional changes. This included forming a risk management committee and developing a risk register to identify, assess, and mitigate risks. The presentation provides insights into managing pressures and expectations in a professional career.

1. www.hanrickcurran.com.au
Risk Management
for 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

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

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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

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International Standard
Risk is the effect of
uncertainty on objectives
Source: ISO 31000:2009
Source: ISO Guide 73:2009

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ISO Guide 73:2009
 Definitions and
vocabulary set out in
the guide that
accompanies the
standards
Source: ISO 31000:2009
Source: ISO Guide 73:2009

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Where risk standards are defined
Source: Standards Australia, www.standards.org.au

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Where risk standards are defined
Source: www.infostore.saiglobal.com and www.iso.org

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Risk Management Relationships
Source: ISO 31000:2009

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Risk Management Process
Identification
Analysis
Evaluation
Treatment
Monitoring

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Source: www.coso.org

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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

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CLERP 9
Source: www.legislation.gov.au

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Audit partnership goes corporate

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APES 325
 Preceded by ASQC1
about quality control
for audit firms
 Mandates risk
management
frameworks for
accounting practices
Source: www.apesb.org.au

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CAANZ support
Source: Chartered Accountants Australian & New Zealand

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Source: www.qls.com.au

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Establishing a Risk Management System (RMS).
Risk identification, assessment and mitigation.
Establishment of a RMS

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Place in the Firm
Source: Westpac Corporate Governance Statement

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Committee Membership
Practice
manager
HR
Partners

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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

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Managing professionals

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David Maister
“Are Law Firms manageable?”
Source: www.davidmaister.com

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How wrong can it go?
Source: ABC Learning Centres Ltd, 2007

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Establishing the risk register
Context
Identification
AssessmentResponse
Monitoring

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Risk categories
 Business
 Regulatory
 Technology
 HR
 Governance
 Stakeholders
 Financial

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Risk Management Register
Source: Hanrick Curran Risk Register

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Risk management systems

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Professional Risk
Source: Hanrick Curran Risk Register

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International Standard
Risk is the effect of
uncertainty on objectives
Source: ISO 31000:2009
Source: ISO Guide 73:2009

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Professional Risk
Source: Hanrick Curran Risk Register

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Assessment criteria

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Professional Risk
Source: Hanrick Curran Risk Register

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Professional Risk
Source: Hanrick Curran Risk Register

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Professional Risk
Source: Hanrick Curran Risk Register

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Residual risk ratings

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Professional Risk
Source: Hanrick Curran Risk Register

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Risk response options
Source: Hanrick Curran Risk Register

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Professional Risk
Source: Hanrick Curran Risk Register

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Other risks
 Data security
 Office disasters / office damage
 Social media fails
 WHS issues
 Failure of key clients / projects

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Benefits of risk management
Benefits Disadvantages

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When do you need to start this?
 $2 million in revenue?
 $5 million in revenue?
 $10 million in revenue?
“Consider a phased
approach to
implementing a risk
management system …
 2 partners?
 5 partners?
 10 partners?

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Source: www.qls.com.au
What are the alternatives?
“Working on the practice,
not in the practice …

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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

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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

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LPA requirements for client
engagement
Source: Legal Profession Act 2007

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Client engagement
Source: “Karma Business” by Mike Keene and “The Trusted Advisor” by David Maister
Share
Refine
Propose
Deliver
Engage
Listen
Frame
Envision
Commitment

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

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

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

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Problems
Non-
conformance
Client
expectation
gap
Staff/Partner
obstinacy
System
complexity
Changing
legal
requirements

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Some personal insights into a professional
career, with some tips for survival.
Managing pressure & expectations

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Asset structuring
 Of course …
“Who do you trust more, your partners or
your wife?”

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The speed of email …

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

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Source: www.headsup.org.au

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Email notifications, set to off

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Kaizen
Source: David Allen & Stephen Covey

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Audit team reading list
Source: Hanrick Curran audit team reading list

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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.

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

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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.

70. Thank you
www.hanrickcurran.com.au
Hanrick Curran
t. (07) 3218 3900
f. (07) 3218 3901
e. enquiries@hanrickcurran.com.au
Level 11
307 Queen Street
Brisbane Qld 4000
GPO Box 2268
Brisbane Qld 4001

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Definitions from ISO 31000:2009
Resources

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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