Internal audits are incredibly important for any business that provides efficient, compliant and secure services to its clients. These are three things (amongst many others) that every legal firm and individual lawyer must offer, which is why internal audits cannot be ignored by any lawyer in the UK.
As RSM reports, nearly 80% of jurisdictions worldwide have adopted the International Standards for Auditing (ISAs), showing recognition for a consistent auditing framework among many businesses. For lawyers, with the increased scrutiny auditing faces, this global uniformity allows internal audits to become more efficient, which is advantageous considering the importance they have.
Financial transparency
A lot of the times that law practice auditors arrive at a legal office or are asked to audit a lawyer, is when there has been a complaint made. This could either be from a fellow professional, client or someone else. However, the majority of times it is related to instances (or supposed instances) of financial mismanagement, fraud and when clients believe they have been overcharged.
Internal audits conducted before any such claims arise can help to provide financial transparency and hopefully prevent these issues occurring. Of course, an external audit will be more trusted by many current and potential clients but an internal one can be arranged a lot quicker, for cheaper and still offer an objective insight. This is easier for larger legal firms where it’s easier to find internal auditors who have no operational responsibility.
Identify and resolve weaknesses
An internal audit for your law firm should be undertaken on a regular basis to pick out any potential weaknesses or areas that are not meeting the required standards. Objective reviewing of your working practices, policies and procedures can help to highlight areas that require work. These can include anything from general risk prevention to making sure that you and others in your team or legal firm are meeting compliance requirements at all times.
Without an internal audit for a while a lot of risks and weaknesses could easily pass you by and make future problems worse. By identifying them internally as well, it allows you to resolve them before this happens and any current or future clients hear about such problems, potentially turning them away from using your legal expertise. This will help to maintain your reputation
Internal audits can help highlight and address issues such as billing fraud, inefficiencies, poor case management and more. These can all increase the legal fees you or your firm charge in the long run, causing real losses, which is why regular internal audits are essential in the legal business.
