Lawyers are in the business of giving advice. This includes advice on how to manage risk. Yet lawyers frequently need to be reminded to follow their own advice.
For the purposes of this article, risk management is taking steps to avoid lawsuits against you or your firm, bar complaints and unpaid bills. This article addresses some of the biggest red flags to be addressed in law office risk management.
Client Intake
It is always wise to fight a problem “on the beaches,” before it gets ashore. For lawyers, this means client and case intake. A disproportionately large number of claims and complaints against lawyers arise from clients and/or matters that should never have been taken in the first place. This may be the single biggest area where lawyers can manage their risk.
There can be a great deal of pressure for lawyers to bring in new business. But we cannot let this pressure overcome our better judgment when we are approached to take on a new matter.
There are many ways to identify clients or cases that should not be taken. In many cases, you will have a bad feeling during the first intake meeting. You should not ignore this feeling. If something seems wrong about the case or the client, you should think twice (or thrice) before taking the work.
Clients seeking to change lawyers raise red flags. The first time this happens you may feel complimented that you are being asked to replace another lawyer. Based upon experience, these situations pose a bad risk. The risk worsens if a client will not let you speak with the prior counsel before you are supposed to replace him or her.
Sometimes clients have inappropriate objectives (ulterior motives for an otherwise legitimate aim). Such clients are more likely to turn on you, either during or after the assignment. Similarly, clients with initial unrealistic expectations about an engagement are predisposed to be unhappy with your work.
Clients who seek to establish new law or who are convinced they know what the law should be (despite your analysis to the contrary) are likely to be dissatisfied with your work regardless of its quality. Such clients might state that “price is no object,” at least until you ask them to pay the bills. Such a statement by itself should raise a red flag.
Avoid taking unscrupulous clients, clients with unrealistic expectations and clients in losing situations who do not appear to be listening to your advice. Such cases have a tendency to turn into involuntary pro bono or worse.
Referrals from friends and family are at risk for all of the above problems. Cases taken as a favor should be carefully scrutinized before acceptance. And, as with all new engagements, it is just as important to run through your normal conflict check and analysis processes before doing such favors for friends or family.
Competence
A lawyer can make a mistake taking a new matter even when dealing with the best of clients. Avoid the temptation to take matters outside your expertise unless you have readily available backup for the legal areas involved. Handling matters outside of one’s practice area is a major cause of lawsuits and ethical complaints. This caution is as true for pro bono as it is for paying clients.
You may be tempted to stray from your area of expertise and learn a new area of law in order to do a favor for family and friends. Do not assume that they will forgive you if things go wrong.
Communication
Poor communication can cause many problems. Communication should be timely and in writing, or confirmed in writing. This applies to communications with clients, counsel and court staff (when permitted). If you are not timely and responsive, the relationship will deteriorate.
This admonishment goes beyond the well-publicized rule of returning telephone calls within 24 hours. That is a good starting point. If you cannot respond to a call, arrange for someone else to call back for you. Update your voice messages to give callers a realistic expectation of whether you will be hearing your messages in a timely fashion. Use automated out-of-office email responses so that those who email you know whether you are reviewing their messages in a timely fashion. These simple steps help to manage others’ expectations, thereby lowering the risk of dissatisfaction.
It is often necessary to communicate by telephone, but certain things must be documented. For example, it is important that you obtain a clear understanding with your client about the identity of the client and the scope of representation. This should be memorialized in written form at the outset of the engagement. Otherwise, it is not always clear who the client is, especially in the corporate setting.
An employee may think that you are his or her attorney, when you think you are only representing the corporation. This should be documented at the outset to avoid confusion, dissatisfaction, challenges to disqualify you from an engagement or worse.
It is important to clearly document client expectations and your advice. This should be revisited periodically throughout the engagement. Memories have a way of changing over time.
A brief written synopsis of what has been agreed upon with a client goes a long way to remind you and your client what the objectives were at the inception of the engagement or at points of key decision making in the matter. This helps avoid dissatisfaction with your services, even if the objectives change.
Bad or untimely communication can sour a reasonable outcome in a client’s mind, leading to an unsatisfied client. Delayed billing can pose similar problems, regardless of whether the outcome of the matter is good or bad. Clients are usually happier to pay legal bills when they have a good result fresh in their memory; those good feelings can fade with time. A late bill often comes as an unpleasant surprise. Such surprises can lead to unpaid bills, ethics complaints and lawsuits.
Technology
There are still lawyers operating without formal or adequate docketing systems for managing case deadlines. You must not only have a docketing system, you must use it. Whenever possible, it should be double checked. If possible, have redundant docketing systems. These can be in paper form or computerized, depending on the size of your practice.
When utilizing technology, lawyers should learn the technology in order to become aware of the technology’s inherent risks. Some communications technologies are less private than others. Without knowing this, a lawyer risks compromising attorney-client privilege or other confidential information.
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Take the time to do things right. Select your clients carefully. Communicate and document your communications. Double check your docketing. If you utilize modern communication technology, learn the technology and educate your clients on how to use it during your representation.
This article does not provide a comprehensive list of all potential problems for those who seek to manage risk in a law practice. But the problems discussed include some of the most common, and most avoidable, pitfalls that lawyers face.
Christopher Howard and Colin Folawn are the co-founders of Schwabe Williamson & Wyatt’s monthly ethics hour CLEs (which are open for all lawyers to attend and listed on the WSBA website).
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