Same Page Risk Management

Over the years, we have noticed that risk management is taken seriously by management.  Managing partners and executive committees discuss with us and know what can get the firm into trouble and what reasonable steps are needed to minimize their exposures.  Simple examples include: monitoring receivables and being responsive to any hints of client dissatisfaction. Generally speaking, management has institutionalized policies and procedures (in manuals, memos, etc.) to match their decisions in risk management.

But something is not working.  There is a disconnect between management and non management lawyers (partners and associates) in this area.  We have observed that there are far more risk management mistakes made by non management lawyers than by lawyers in management even after adjustments for numbers (there are obviously far more non management lawyers than management lawyers).

This is dangerous for two reasons:

1) An environment of inconsistency can be used against you in court. Your attorneys (and the firm) will be held liable to your own standards in addition to the usual standard of care.

2) Failure to follow procedures and the ensuing problems undermine firm plans.  For example, if the firm decides to increase their litigation department’s average case size since they are comfortable with their docket / calendar system, failure to follow procedures to input data properly into that system undermines the firm’s strategy.  The added exposure in taking larger cases, might not make sense with the added exposure to the firm in extra professional liability claims and future premium increases.

What can be done?  Same Page Risk Management. All lawyers (management and non-management) need to be on the same page – know what the firm procedures are and then management needs to check and verify their compliance.  Come up with 10-20 simple questions that apply to your firm practices. A few docket, a few file retention, a few client service related, and a few billing related.  Have management answer the questions and then non-management answer them.  See where there are discrepancies and most importantly – get everyone on the same page.

 

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