Regular communication is key to effective risk management

By Thomas Berman, Principal, Berman & Associates

Law firms come in all shapes and sizes. Smaller firms are generally far less likely to engage in institutionalised risk management efforts. For larger firms, developing an ongoing process by which to keep risk management efforts fresh and meaningful is a difficult task.

Communication

The foremost issue is perhaps the element of ongoing communication. Although that may sound trite, the reality is that for a risk management partner or shareholder, a general counsel or a committee of lawyers working in the area of risk management, the most important task is the ‘push pull’ between that individual or group and the structured elements of the firm involved with risk management issues on an everyday basis.

That means, for example, that those individuals involved with intake, whether it be a single individual, a committee or several individuals, require a means by which their feedback is communicated to the individual(s) charged with risk management responsibility for the firm as a whole.

This isn’t as easy as it might seem because of the exigencies of time and the pressure of business, which works against this kind of communication. The answer is, of course, to maintain a rigorous series of communications (meetings, email groups and the like) on the subject so that discussion may be had on an ongoing basis.

This is an even greater challenge for law firms which have several offices. The important lesson though is that for risk management to work on an everyday basis, the parties who are most engaged in the elements that make up the signal risk management elements must communicate with one another on a constant basis.

Feedback channels

From long experience, it is clear that law firms that are good at keeping their firms safe and secure are those that solicit and utilise information from a variety of sources. Thus, a good portion of the challenge relates to the development of means by which the opinions and feedback from diverse elements of the law firm can be heard.

A law firm with multiple offices is particularly challenged to create a means by which individuals in each office can make themselves heard by a centralised committee, a general counsel or risk management partner/shareholder tasked with risk management responsibilities.

It is clear that give and take between and among these various practice groups, offices and/or strata in the firm is required for an effective and efficient risk management scheme. Law firms which are most effective at doing it are those that generally already have better communication between and among various groups within the law firm. Those firms have an excellent chance of being able to make good on their mandate to create a safe and secure environment for the practice.

Controlling pathways

Pathways are the connectors between various activities occurring in the firm contemporaneously. The link between the first point where a lawyer meets a potential client and the point where representation is accepted is a pathway. That pathway, taken as a continuum, includes:

• evaluation of a potential client;

• evaluation of the legal issues involved;

• evaluation of the potential conflicts;

• a determination as to whether or not the client is suitable for the firm, and

• a determination on the ability of the firm to take on the new responsibility and to discharge it appropriately.

All of these elements occur along this one particularly significant pathway. The ability of the law firm to ensure that its risk management efforts are meaningful is determined by the degree to which the firm can control the various elements along this particular pathway.

Indeed, the usage of various instrumentalities, including the general counsel’s offices, the risk management partner/shareholder’s efforts and the risk management committees’ efforts, should all dovetail along this particularly sensitive path. Any means by which a law firm may add or enhance efforts to be better able to control and advance these responsibilities adds to its ability to stay out of professional liability difficulty.

tberman@bermanassociates.net