Friday, August 24, 2012

Good advice to law firms

See - http://www.lexology.com/library/detail.aspx?g=19d5a3ac-fd96-49cd-8631-e805d0484d26&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+Federal+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2012-08-23&utm_term=


" x x x.


The mandate for lawyers is advising their clients on how to minimize and manage risk. However, as the old expression goes, don’t be your own lawyer when dealing with complicated risk assessment issues that you may face in your practice. However, lawyers and law firms often fall short on managing the risks they encounter in their day-to-day practice. Our fastpaced, hi-tech, high-stakes legal landscape requires lawyers to competently represent their clients while staying abreast of changes in law and fulfilling their professional ethics obligations.  
Disregarding “red flags” before or during the course of a representation is no longer a luxury that any law firm can afford. Firms should continually look at their own policies, practices and procedures and think about where improvements are needed due to the adoption of new ethics rules, recent developments in case law and emerging guidance from state bar association ethics committees.  
Here are some ethics and risk management issues to consider:
  • Does the firm circulate conflicts checks emails?
  • Does it obtain conflicts waivers from clients in writing?
  • Are engagement letters countersigned by clients?
  • Does the firm perform due diligence on clients?
  • Are there procedures for issuing opinions?
  • How are part-time “of counsel” relationships managed?
  • Who checks whether incoming lawyers are properly licensed?
  • Is client data backed up by the firm?
  • Does the firm have escrow procedures?
  • Has it developed a social media policy?
  • Is the firm complying with the attorney advertising rules?
  • What about developing a disaster recovery plan?  
All this (and more) is part and parcel of a diagnostic approach to effective law firm risk management.
Why Should My Firm Have An Ethics Audit?
  • Identify particular areas of risk or gaps in ethical compliance
  • Develop a workable framework to respond to particular events or circumstances
  • Understand implications of ethics rule changes, new guidance from state bar association ethics committees and recent case law
  • Formulate appropriate risk prevention and loss prevention strategies
  • Implement critical procedures and practices to mitigate potential liability exposure
  • Evaluate, monitor and update existing policies and practices on an ongoing basis  
Why Does My Firm Need An Ethics Manual?
  • Comply with the New York Rules of Professional Conduct which govern the conduct of law firms and lawyers, and any other laws, rules and regulations applying to law firms and lawyers
  • Protect the firm, its lawyers and clients from potential liability exposure
  • Secure confidential client data from inadvertent disclosure or unauthorized access
  • Avoid potential claims from nonclient third parties
  • Make the firm a more desirable risk for professional liability insurance carriers regarding terms and conditions of coverage
  • Convey to regulators or lenders that the firm is properly managed and fiscally sound
  • Minimize allegations of conflicts of interests, potential disqualification motions or malpractice claims, and possible fee disputes and collection issues
  • Avoid possible disciplinary actions and court-imposed sanctions  
Aside from taking a more integrated approach to risk management, it is possible that these measures may be value adds for clients. Keep in mind that unrecognized and unmanaged risks
x x x."