Lawyers and law firms are faced with many different threats, both external and internal. If asked about potential risks to their practices, many lawyers would immediately think about malpractice. But the risks they face go beyond professional negligence claims.
To fully protect your firm, you should look at a broad range of areas of potential risk to determine your firm’s exposure and then develop policies to reduce or mitigate those risks.
What Areas Should You Assess?
At least once a year, you should analyze how well you are protected in each of the following broad categories:
- Insurance coverage
- Governance and policy documentation
- Hiring, training, and retention of attorneys and staff
- Ethics compliance
- Client intake and conflicts procedures
- Docket and file management systems
- Financial management and trust accounting
- Marketing/advertising systems
- Disaster planning
- Succession planning
Within each of the areas above, there are dozens of more specific questions that your firm should explore periodically. As law firms grow, so do their risks. What was sufficient with one or two lawyers will not be sufficient with ten. What works when a firm had a handful of clients won’t work when it has hundreds of clients.
OK, Now What?
After you’ve taken a deep dive into the various areas of risk facing your firm, you need to do the following:
- Implement policies and procedures for areas of risk that have previously been unaddressed or not adequately addressed.
- Enhance policies and procedures where needed. Risks evolve. So should your policies and procedures.
- Train your attorneys and staff on those policies and procedures so that everyone knows what they should and should not be doing.
- Periodically monitor and test to confirm everyone is adhering to the applicable policies and procedures.
Don’t Put Your Head in the Sand
We lawyers are busy. Working on our practices and firms often take a backseat to the day-to-day servicing of clients. But we would all be well-advised to take at least a half-day a year to take a deep dive into the various areas of risk and implement and monitor systems that minimize those risks.
As they say, an ounce of prevention is worth a ton of cure. A few hours now could save hundreds of hours (and lots of money) later.