Develop one before a complaint happens
By Judith Equels and
Law Office Management Assistance Service
In a perfect world, lawyers would operate their law firms untroubled by the specter of complaints. In the real world, lawyers must do all they can to protect the firm and its clients from practice management errors. Firms that are not well organized in managing the pitfalls and perils in everyday operations may implode from the pressures of undergoing a Bar grievance investigation. Firms that are managed properly are better positioned to avoid the costly and emotionally devastating experience of defending and resolving a complaint.
The best way a law firm can avoid complaints is by analyzing its policies, processes, and procedures. Start with a self-audit. The Florida Bar’s Law Office Management Assistance Service (LOMAS) can provide you with a sample self audit questionnaire.
While the questionnaire is not a one-size-fits-all panacea, it is a start. The LOMAS practice management advisors are available to discuss the best practices or “Rules of the Road” addressed in our self-audit template. LOMAS also can provide a brief list of practice management resource books that every law firm should have on hand.
Simply put, law firms that have a documented administrative management structure, with duties and responsibilities clearly defined, operate more productively, efficiently, and profitably, as well as do a better job of avoiding risky actions. What follows is an overview of the major areas examined in a law firm self-audit.
Structure and Governance
Even solo practitioners must have an effective management structure. An organized law practice does not make one a better lawyer, but it does go a long way in avoiding complaints because operational decisions have been considered and then put in place. Law firms may have a managing partner or an executive committee, or both. The structure and governance of the firm should be delineated in the governing documents: partnership/shareholder agreement, by-laws, and a buy-sell agreement. Samples of these documents are available on the LOMAS page on the Bar’s website at www.floridabar.org/LOMAS.
Determining what kind of work, how much work the firm can accept, and how well the firm understands its work capacity is at the core of a risk management effort. It is never the work that picks up the phone and calls the Bar. A thorough initial consultation and evaluation of the potential client, as well as the work that person brings to the firm, is the first crucial step in the intake process.
Who can bind the firm to representation? It is often said that a firm’s intake form is the Rosetta Stone of representation. If so, is the firm asking all the questions necessary to avoid conflicts, do the work properly, ensure the clients’ expectations are reasonable, maintain adequate contact with the clients, and earn enough revenue to fund operations?
Case Processing and Client Relations
The quality of the systems designed to carry out the firm’s day-to-day work directly affect how well the firm processes clients’ cases and matters and how well the firm communicates the status of the work to clients. Are there practice management checklists and procedural handbooks in place? Are they reviewed annually? Managing client relations activities is one of the most important aspects of a law office marketing effort. Everything that happens in a law firm has a direct or indirect effect on the client. Therefore, the way a law firm conducts its business has a direct influence on its relationship with clients.
Human Resources Management
With compensation and benefits comprising the largest expense to the law firm, every law practice should have at least one person who has undergone formal training in human resources management and is up-to-date in employment law compliance. For solo practitioners with just one or two employees, this means arranging the training for yourself as well as your staff. Sample policy manuals are available from LOMAS, the ABA bookstore, and several well-known legal publishers. Policy manuals and process/procedures handbooks document rules, limits, and boundaries: they provide direction. For example, does the firm have written policies addressing client confidentiality and technology usage? A large part of a client’s impression of your law firm will come from the actions of your staff. It is critical to your success that your staff is well trained and motivated to provide excellent service to the firm’s clients.
Financial Management and Trust Accounting
Financial management in a law firm means that the firm has anticipated and planned its financial requirements and has control over the flow of the money. Financial management covers a broad area of activity in a law firm: timekeeping, billing, budgeting, trust accounting, internal controls, financial recordkeeping and reporting are all included under the financial management umbrella. All of these activities should be coordinated to produce an efficient accounting and recordkeeping system. The quality of the firm’s financial management effort affects how well the firm can make meaningful decisions. Mastering the elements of financial management should provide a sense of control over the direction the law firm is heading.
In a law office, as in life, often the time needed to review systems and procedures that ensure quality legal services are being delivered to clients just never seems to be available. There is always one more telephone call to make, one more client to talk to, one more motion to review, one more question to research, and one more bill to pay. Just like the appointment for a dental check-up, it is easy to put off noncritical activity until next month.
The practice management advisors at The Florida Bar’s LOMAS department believe the maxim “an ounce of prevention is worth a pound of cure” applies to most areas of life. It is less painful and less expensive to avoid mistakes than to correct them after they have occurred.
The Florida Bar’s Law Office Management Assistance Service (LOMAS) is a benefit available to all members. Practice Management Advisors can be reached at (850) 561-5616.