By Patrice Kennard, Senior Risk Consultant, Wilson Allen
How well does your risk management strategy protect your firm? Can you be certain it would prevent these kinds of inadequately cleared conflicts of interest which resulted in recent law firm disqualifications:
- Representing a company in litigation while concurrently representing one of the hundreds of defendants in a wholly unrelated matter
- Representing a company in a creditor proceeding while concurrently representing the estate of the company’s deceased chief executive officer
- Representing a company where – because of Outside Counsel Guidelines referenced in the applicable engagement letter – it was determined that the firm effectively had an ongoing attorney-client relationship with an affiliate of an adverse party in the litigation
If your risk strategy doesn’t prevent decision-makers from missing the forest for the trees, it’s a strategy for risky business. And the financial and reputational stakes are high. Embedding enterprise risk management protocols into the firm’s processes for making business determinations is the only way to minimize exposure. The integral components are information sharing, consistent checks and balances, and visibility:
- Share information to ensure robust conflicts checks; strengthen client communications with disclosures that promote mutually beneficial relationships and limit firm liability.
- Maintain consistent checks and balances that ensure your firm clears conflicts, aligns its practice area and office decisions with the larger goals of the firm, secures rock-solid client terms, and meets its regulatory and other compliance obligations.
- Provide visibility into the firm’s business development efforts, new client and matter onboarding, lateral hires, and compliance requirements. For example, screening memos, strategic goals communications, ethics training, and circulation of daily “new business” reports all serve as mechanisms for helping attorneys and staff identify and avoid conflicts of interest.
Every firm is unique, but one constant applies in risk management: The best risk strategy is to give decision-makers the clearest view of the forest and the trees.
To discuss options to strengthen your firm’s risk management processes, visit the Advisory Services page at the Wilson Allen website.
See page 25 to read the article in Modern Law:
Modern Law Issue 42