About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


17 Prof. Law. 1 (2006)

handle is hein.journals/proflw17 and id is 1 raw text is: An Integrated Law Firm Loss Prevention Matrix Peter J. Winders He who flees from the noise of the fear shall fall into the pit; and he who comes up out of the midst of the pit shall be caught in the snare: Isaiah 24:18, pla- giarized in Jeremiah 48:441 As if a man fledfrom a lion, and met a bear; escaped into the house . . and a snake bit him: - Amos 5:19 A combination of circumstances creates the serious professional liability claim; and a combi- nation of measures can protect against it. The guy in Amos may have been negligent in provoking the wildlife, but with better pest control, he would have been okay. LARGE CLAIMS AGAINST LAWYERS Almost all very large claims against law firms in the past 25 years have involved a convergence of several of a group of specific factors listed in the table below. The large claim tends to be a perfect storm situation where not just one thing goes wrong but several things coincide to make the sit- uation worse. This observation was true of the sav- ings and loan scandal cases, the recent corporate accounting collapses, the dot com cases, and the aiding and abetting claims - in which the plaintiff contends that the defendant's transaction lawyer on various theories became a participant in defen- dant's schemes. It is rare that a really big claim involves only one or two of these factors. Some of these factors allow problems in the door, while other factors allow problems to grow undetected or unaddressed until they cannot be contained. COMPREHENSIVE LOSS PREVENTION The loss prevention structure for a law firm involves a combination of elements policies, programs, systems and aspects of firm culture. Peter J. Winders is General Counsel, Carlton Fields, Tampa, Florida. Done right, they are complementary and can pro- vide layers of protection. The components can be classified as follows:2 Gatekeeping Systems - These are systems that can be enforced by strict application of procedures as part of a process that everyone has to do. An example is the Business Intake System: to open and record time to and bill a matter, certain steps have to be accomplished, and the firm can protect itself by adding steps with loss prevention value. Because everyone wants to record time and bill, this is an occasion to impose other tests before that can be accomplished. Another example is the Lateral Hire procedure, which similarly may have imposed on it certain checks and requirements providing loss prevention information and requir- ing loss prevention or risk decisions. If mechani- cal steps are required before something can be accomplished, that also provides an opportunity for application of the additional judgment of a par- ticular person or group. A number of things can be guarded against at the gate by a Business Intake System that requires signoff by one or more persons of trusted judg- ment other than the originating lawyer: • Unworthy or undesirable clients. By requiring signoff from a person of trusted judgment other than the originating lawyer, and by providing client background informa- tion through appropriate research to aid such judgment, the unwitting acceptance of a client with a history of changing lawyers, fraudulent activities, or other undesirable traits, is dimin- ished. • Dabbling. If the business intake review includes the leader of the department in whose specialty the matter falls (not the head of the originating lawyer's primary depart- Continued on page 4 2006 Volume 17 Issue Number 1