Risk Management Policy

Risk management requires an understanding of the risks that arise in the practice of law, assessing the likelihood of their occurrence and putting in place policies and procedures to control and avoid them.

The following table identifies risks and proposes actions and procedures to properly deal with them.

Risk

Action

A conflict of interest

Matters commence with a conflict of interest check. Searching under the client’s name in the information section of the matter screen in LEAP will extract from the database that name wherever it may have been entered, alone or in any capacity associated with other entities.

If a potential conflict is found to exist, then the conflict of interest policy sets out the action to be taken.

By way of example, when a child is buying from a parent and dispenses with enquiries later to discover an adverse affectation and blames the solicitor for its non-disclosure. The necessary step to take is to insist on written instructions dispensing with the enquiries.

Failure to identify the client

Due to money laundering, identity fraud and other illegal activities best practice requires each client to be identified.

Incomplete retainer

Retainer instructions, completed at the first interview with the client, assist the practitioner to take detailed initial instructions. They record the information received, the work to be completed, the time frame in which it is to be completed and the likely cost of completing that work. If there is any doubt about what is required, then the retainer should be confirmed by the client in writing.

All changes to the retainer during the course of a matter are to be confirmed in writing.

Failure to agree on basis of charging and likely cost

An initial letter and fee disclosure should be sent to the client in every matter. This letter should confirm and define the retainer and comply with the cost disclosure regulations.

If the client is to provide documents or information before some action can be taken, then they must be reminded. This requirement must be followed up until the documents or information is received or the retainer is terminated. A failure by a client to provide information does not avoid the risk of liability for inaction. If there is persistent refusal to supply necessary information the retainer needs to be terminated.

All changes to the retainer during the course of a matter are to be confirmed in writing.

Risk

Action

Unauthorised document handling

An authority to release documents is required from the client. Third parties that are picking up documents should have a signed authority and produce a driver’s license, a copy of which should be kept on the file with a signed receipt. If the document is from safe custody, then the electronic record of document movements must be completed.

If acting for a couple, the authority of both of them must be held before handing over documents, and particularly money, to one of them.

Failure to properly draft or check documents

Non-standard documents require partner approval before dispatch with focus on ensuring that they reflect the client’s instructions.

Failure to follow a plan to conduct matters

By following a sequential path established by a matter plan, the matter will proceed according to a proper work plan for that matter type.

Matter control

To avoid oversights, enter an agenda date for the next event or review date. Chase up slow responses from other parties. Keep the client well informed. Contact them – don’t just wait until they contact you.

Risk

Action

Failure to keep file notes

Lesson: no file note – no defence, bad file note – bad defence, good file note – good defence.

A file note, which can be a costing time slip, must be made in relation to all calls and attendances throughout the matter. This includes calls that are unsuccessful or to a number incorrectly given by or on behalf of the client. A complaint in relation to a failure to communicate with the client cannot be argued in the absence of records of unsuccessful endeavours to contact the client whether or not it is possible to leave a message for them.

File notes of conferences and meetings should cover information received, questions asked and advice given.

All file notes must be dated and entered on the file and must identify the writer and those present at and the length of any meetings. They must be entered as close as possible to the event being recorded, not left until a later time.

Failure to review files

All files must have constantly changing review dates, progressing from opening until closure of each file.

Failure to observe time limits

All essential time constraints must be recorded, whether they are to meet client expectations or statutory time limitations. This is particularly so in litigation such as personal injury matters.

Client dissatisfaction

All clients must have their questions answered fully as soon as possible after they are put. All phone calls must be returned the day they are received, even if by someone to explain that the person with whom the client wishes to speak has been unable to return the call but will do so the next day. All promises must be kept.

The client must have a respect for firm integrity. This means we do as we say in the time that we say and for the cost that we say.

Risk

Action

Sloppy accounts

The trust account regulations must be strictly observed. Any doubts about what to do must be referred to a principal immediately. Reconciliations are only required monthly however they should be done weekly. If any breaches occur, a written explanation must be saved onto the accounts file for review by the accountant and handing to the trust inspector at the time of inspection.

All money matters must be dealt with the day they arise. No banking is to be left undone. Receipts must be issued at the same time as money is received.

Lack of personal attention and pride in work

Each file must be conducted as if the firm is the client with the same urgency and interest in the outcome. Chase up slow responses from other parties. Keep the client well informed. Contact them rather than waiting until they contact you.

Complaints handled poorly

All complaints other than of a minor nature must be referred immediately to a principal who will either deal with the problem themselves or allocate the task to an appropriate staff member. Any proposed remedial action is to be taken promptly.

Risk

Action

Mistakes handled clumsily

Mistakes happen. When they do immediate responsibility must be taken for them and they must never be concealed. Office policy must encourage owning up to a mistake as soon as it is made. A second person’s view of what to do before taking rectification action should be obtained. It is critical that when a mistake has serious adverse implications for the client that the client is informed immediately and participates in any remedial action. A principal must be kept fully informed at all times.

Finalising the retainer

In all instances the client must be informed in writing that the matter is completed. If some action is required in the future, like exercising an option, convey to the client in writing that the firm will not be taking such action and that it is their responsibility. If there are outstanding issues or limitation issues, advise in writing accordingly. Finalise accounts, check if any documentation should be kept in safe custody or sent to the client. Close the file.

Failure to communicate with staff and exchange of information

Staff meetings are held regularly when each person’s next action summary will be distributed with the mail. This is a regular opportunity to discuss any issues or worries and to allocate work.