It ain't what you say...

In this climate of increasing claims and the impending introduction of the Scottish Legal Complaints Commission, it might be interesting to take a sideways look at another major industry in Scotland to find out how they manage risk and, in fact, lead the world in their culture of managing risk.

Could we learn from another industry even though they may at first seem to have very different problems from those we face in the legal world?

Recent roadshows by Phillip Yelland of the Law Society of Scotland and Alistair Sim of Marsh have shown how claims do not necessarily result from the places we expect them to. Human error is the main risk factor for solicitors whatever the area of practice, and most claims could have been prevented – mostly by improved communication. So how do we do this?

One starting point is to look at what caused the oil and gas industry to wake up and take risk seriously.

Lessons from disaster

In the global oil and gas market, health, safety and the environment and their associated risks have been going through major transformation since the time of the Cullen report which followed the Piper Alpha disaster, in which 167 people lost their lives on 6 July 1988. (The financial losses which ensued were estimated at £1.7 billion.)

This single incident was caused by the communication, from one shift to the next, about a maintenance job which was not complete. Also the culture at the time meant that the focus was on production of barrels of oil, not on safety. The root causes of the incident lay in communication and behaviour: seemingly simple causes, but resulting in catastrophic consequences.

In our industry, it is unlikely that we would experience a catastrophe on this scale, but it is worth considering what the real impact of any major risk incident would be to

• reputation;

• profits;

• ability to attract and retain quality people;

• our subsequent insurance costs.

It is certainly worth considering what the future impact would be if we failed to view the impending introduction of the Scottish Legal Complaints Commission recommendations as our wakeup call to manage risk in a more enlightened way. In the medical field, 8.9% of the NHS budget is currently being spent on claims. Will spending on that scale reach our industry soon, or are we perhaps even there already?

A model for culture change

Let us consider for a moment what the oil and gas industry has been doing that we could learn from? First, they recognise that safety, both of people and of the environment, is culturally driven and if you don’t work on the culture (i.e. the norms, attitudes, beliefs and values – in short, “the way we do things around here”), you are unlikely to change behaviours, since studies have shown that it is culture that drives behaviours.

The oil and gas industry worked together to create a model of what culture looks and sounds like, and this model is used to help people have conversations about where they are on this cultural ladder and where they think their team and business are placed on it. Specific tools and programmes can then be implemented to aid the business to move up the ladder, and create a culture which incorporates habits for the good management of health and safety that in time become a matter of course for the business.

This process takes time and the job never ends. However the benefits can be substantial. After implementing a cultural habit change programme in a UK plant after a very serious accident, Coca Cola found that quality and productivity improved by 16%. Extraordinary results by any measure, simply achieved by taking the time to work more safely!

Steps to safety

At the time of the Piper Alpha tragedy, the oil and gas industry had a very casual attitude to health, safety and the environment, which would now fall into the “pathological” category in the diagram. Typically, the thinking that this exemplifies would be, “Who cares as long as we’re not caught, just get on with the job. It’s a risky business we’re in. Sack the idiot who had the accident!”

So, the questions we might wish to ask ourselves now could be, “Are we still at this level at times with our reaction to claims? Do we still blame the solicitor who dealt with the client or, even worse, the client?”

The next stage on from the “pathological” stage in the cultural ladder is what we call “reactive”. In the oil and gas industry this means that every time an accident occurs and someone is hurt, all the managers make themselves busy making safety the highest priority. However, as soon as the dust settles, they are back to business as usual with risk being put way behind production.

The question here for the legal sector could be, “Do we still give high attention to risk issues when we have claims but put it on the back burner when the dust settles?” This creates a rollercoaster type of culture around risky behaviour which does not give a good message to our people about our attitude to intelligent management of risk.

Next in the cultural ladder comes the “calculative” stage. In oil and gas this meant the industry took safety seriously by creating lots of management systems to manage processes and procedures. Again however this culture still resulted in fatalities; we now know that it is only through people that good systems are delivered and at this stage companies were still not paying attention to human behaviours.

Our equivalent is our case management systems and file reviews. These have really helped us manage cases, but they don’t take out the risk element – the main reason why claims arise in the legal world – that is, delays and inadequate communication with the client. Put simply, it takes a person to do this, not a case management system or a safety rule.

Step 4 of the cultural ladder is called “proactive”. At this stage, we have the systems in place to manage all hazards. We are still concerned with statistics but we are involving the workforce in all areas of concern. We are working on the “at risk” behaviours so that they don’t become an accident statistic. Money is available to fix things.

In the legal world this might look like: we involve all our people in risk management, both in terms of systems and of training to use them appropriately, but we also train in client care and communication at all levels. Our claims are steadily decreasing over the years.

Finally we reach stage 5, “Generative”. At this step of the ladder we are striving for continuous improvement. We recognise it’s a constant job. Safety and risk are managed from the top down and bottom up. All ideas are listened to.

In the legal world this might translate as: “We now recognise that it is human behaviour and communication which causes the “at-risk” behaviours which could result in claims. We have created an atmosphere to work in where all staff are encouraged to contribute to the way we manage risk here. Aggressive, pressurised behaviour is unacceptable as it leads to mistakes being made. The way we manage and treat our staff has a direct impact on the way the client eventually receives the service.”

So, where are you on this ladder and where is your firm?

Communication as a tool

In oil and gas a myriad of different measures are required to move up from the bottom of the ladder towards the top. “Engineering out” risk by designing tools and equipment – safety by design – is one approach that has been popular in the past. The creation of sophisticated health and safety management systems and procedures, and training for all staff, have helped reduce incidents too. However, even with these two measures, injuries and fatalities were still occurring. Furthermore, incident rates had plateaued.

At this stage the industry began to take account of the human factors which it was found, after investigation, were involved in 96% of all incidents. As a consequence of this new way of thinking, staff at all levels have been trained in communication and intervention tools, so that they have the skills to coach each other and manage those around them to take responsibility for their own and each other’s safety. These skills include the psychology of understanding why people decide to take risks, the way we communicate, and the impact of that communication on the behaviours of others. The fact is that there is now an army of skilled communicators out there drawing our oil out of the ground, and they are hurting themselves much less than they used to.

Is the job ever over, you might ask? The answer is a resounding “No!” Is oil and gas at the generative level? Again, regrettably, the answer is no. However, are they getting there? Is there steady improvement in the right direction? This time, happily, the answer is “Yes”!

In the legal profession words are our forte. Could we learn from another industry in Scotland which is leading the world in its risk management? To adapt the old Bananarama song, they know that “It ain’t what you say, it’s the way that you say it. That’s what gets results.”

To find out more about managing risk through intelligent communication, please contact Alistair Sim at Marsh.

Louise Robb is managing partner of Louise Robb Associates LLP. She is a qualified accountant and was an accountant and director of finance for 12 years in the legal profession in Scotland, before setting up her own consultancy in 2002, concentrating on training, facilitation and mentoring in the UK, Europe and Africa across many industry sectors. www.louiserobb.co.uk .