Turning People Risk into a competitive edge in legal and professional services

People Risk: A present issue

Written by Matt Johnson.

Stress, burnout, absence, and errors are shaping the performance curve of today’s legal and professional services firms. 

The sector’s longstanding culture of long hours and perfectionism is facing new pressures: elevated client demands, rapid AI adoption, tighter margins, and intensifying scrutiny on quality and ethics. 

The result is a material People Risk problem – one that carries clear commercial consequences in productivity, attrition, client outcomes, and indemnity exposure. However, these risks can be adequately mitigated when leaders bring risk, HR, benefits, and operations together through shared data and coordinated interventions. 

A rising cause for concern

Recent evidence shows the sector is at a critical People Risk junction. Six in ten UK legal professionals report poor mental wellbeing, with four in five regularly working beyond contracted hours. These conditions are strongly associated with burnout and intent to leave.

LawCare’s 2025 report highlights high burnout risk among younger lawyers; 79 per cent work extra hours and more than half the respondents were considering leaving within five years, illustrating an acute retention and succession risk felt across the industry. 

Across the wider workforce, absences remain costly. The ONS estimates 148.9million working days lost in 2024 (4.4 per worker), while CIPD finds average absence at 9.4 days per employee, nearly two working weeks, with mental ill health a leading driver of long‑term absence.

The commercial exposure

If left unassessed and poorly managed, People Risk can manifest into business wide issues. 

• Performance and productivity: Deloitte estimates £51bn in annual costs to UK employers from poor mental health, with presenteeism the single largest contributor (≈£24bn). Within the legal industry, 2024/25 studies estimate an 18.7 per cent productivity drag and up to £33million losses for a mid-sized law firm, with presenteeism accounting for approximately 70 per cent of the hit. 
• Talent and continuity: Sector surveys warn that over half expect to leave current roles within five years and a third might exit the profession, adding recruitment, onboarding, and lost‑knowledge costs.

Quality and indemnity risk: Negative impacts on mental health and changes in behaviour increase the likelihood of professional errors such as missed deadlines, poor communication, and inadequate supervision, all of which are common triggers for indemnity claims.

The need to move beyond just engagement

As highlighted by Howden’s expert People Risk team, gains come from coordinating risk, HR and benefits into a single People Risk strategy, eliminating duplication and focusing on root causes rather than symptoms. Organisations that joined up policies, data and case management unlocked productivity gains and reduced high‑risk incidents without new insurance spend (Strategic Risk 2025).

The People Risk framework: an end-to-end approach

Addressing People Risk effectively starts with clarity. A data‑led approach brings together information that is usually scattered across HR, operations, risk, and wellbeing systems, creating a single view of where pressure, inefficiency, and exposure are building. By establishing a clear baseline of data such as absence trends, utilisation patterns, turnover indicators, error logs, wellbeing usage, and workload, organisations can move beyond assumptions and identify the real drivers of stress and performance loss.

From there, patterns become actionable: which teams are overextended, where supervision needs strengthening, where demand is misaligned with resourcing, and where early intervention could prevent long‑term absence. This evidence then shapes a targeted action plan, prioritising risks with the greatest operational and financial impact.

Finally, progress is measured against the baseline to show improvement over time.

A data‑led framework ensures decisions are precise, defensible, and commercially grounded –turning People Risk from a reactive issue into a strategic advantage.

Why now is the time to act

Across the UK, long‑term sickness and absence are continuing to rise, with mental ill‑health now the single largest cause of extended absence across key workforce groups. For law firms, where accuracy, responsiveness, and sustained cognitive performance underpin client delivery, any long-term absence creates unavoidable commercial exposure – from lost billable hours to increased risk of mistakes and stress‑related attrition.

At the same time, the market is demonstrating what effective action looks like. Group risk providers report that 72 per cent of newly absent employees returned to work within the year when supported through early‑intervention and rehabilitation pathways. These outcomes show that firms who take a proactive, structured approach are seeing measurable financial benefits through reduced absence duration, lower claims, and more stable teams.

The message for legal and professional services is clear: People Risk can no longer sit in isolated HR, wellbeing, or risk silos. Firms that integrate data across these functions and align policies, benefits and risk management are already unlocking productivity gains without additional spend.

This is precisely where Howden supports clients – helping leaders quantify their exposure, identify root causes, and implement interventions that strengthen resilience; turning People Risk from a growing liability into a source of competitive advantage.

From unidentified risks to a competitive advantage

For legal and professional services firms, expert, data‑led insight can move the needle from continuing pain points to actionable risk, fewer errors, faster return‑to‑work, better utilisation, higher retention, and stronger client outcomes. 

The firms that win will measure what matters, invest in targeted preventive interventions, and hold leaders to account for healthy workload, turning a cost centre into a competitive edge. 

At Howden, we can support with your end-to-end process to ensure your company is best placed to both mitigate workforce risk and maximise performance.

About Matt Johnson, People Risk Consultant 

Matt works with organisations across various sectors to identify and mitigate the human factors that drive liability, indemnity exposure, and operational disruption. His approach blends strategic advisory, insurance placement, and data-led risk modelling to help businesses reduce exposure and build resilience.

He has contributed to cross-market white papers, exploring how people-related risks influence insurance outcomes, drive financial exposure, and shape business continuity. He focuses on helping organisations, implement proactive strategies that reduce the likelihood and severity of risk events, ultimately protecting both financial performance and operational stability.

Whether advising on professional indemnity, employer liability, or income protection strategies, he supports clients translate complex People Risks into actionable, measurable solutions that protect both people and performance.