Evans-Klevens

Law firms cannot be expected to micromanage employees, and instead they rely on attorneys and staff members to perform their duties in a legal or ethical manner. However, while firms may be confident that employees will conform their behavior to applicable standards, there are inevitably times when even those most outwardly competent employees may conduct themselves with less-than-perfect ethics or otherwise make a mistake.

All law firms will likely face ethical issues or alleged claims of malpractice at some point. While law firms are often thought of as single entities, individual attorneys and staff make up the structure of a firm and perform the day-to-day tasks. Acknowledging that a firm is made up of individuals, law firms can take steps to reduce the likelihood of wrongdoing by their employees and, accordingly, limit risks for the firm.

Below are some tips for law firms to keep their employees properly informed and to encourage them to act ethically and properly.

Promote Disclosure

The worst time for a law firm to hear about an ethical or liability issue is when that issue has turned into a bar grievance, malpractice suit or other form of potential exposure. Instead, many law firms are taking steps to create a safe space for people to identify and self-report errors while still allowing the firm to enforce its standards of conduct.

Indeed, the later an ethical violation or error is reported, the less opportunity there is for the law firm to correct the mistake or to mitigate any potential losses. In addition, an attorney who brings a potential error or failure to the attention of the firm may be able to benefit from the in-house attorney-client privilege between the attorney and the firm. Of course, those protections and abilities to investigate or mitigate cannot be used if the firm is not aware of the disclosure.

Staff and attorneys alike are more likely to disclose issues if they do not view the law firm as “management” or “the enemy.” Indeed, the law firm has as much interest in identifying and mitigating errors as does the employee. The question for the law firm, then, is how to create an atmosphere that encourages disclosure.

A good place to start is by encouraging attorneys and staff to report any suspected or observed mistakes to the firm’s general counsel. Employees should feel comfortable receiving advice from the general counsel with the understanding that the general counsel can take steps to minimize any potential risk to the firm.

Attorneys and staff also can be made aware of the risks if the firm is not informed of potential mistakes or errors. Most severely, the law firm could lose insurance coverage if the issue is not disclosed. Under many standard policies, law firms have to report to their insurers any circumstances that could give rise to a claim when applying for or renewing insurance. Where an attorney in the firm is aware of circumstances that could give rise to a claim, that knowledge may be imputed to the firm generally, even if the attorney never told anyone else at the firm of the potential claim. (The possible exception to this rule is if a policy also has an “innocent insured” provision.) Thus, a law firm could inadvertently risk its coverage simply because it did not create an environment that encouraged attorneys and staff to report potential issues.

Law firms can also take care to emphasize that the firm’s primary goal is not to punish the employee when potential errors are reported. Employees are too often concerned that they will get in trouble for reporting their own errors and instead hope the problem will just go away. By accepting that errors happen and that such errors can be addressed after full disclosure, law firms can reduce their own risks.

Keep Employees Informed

Connecticut recently joined many other jurisdictions in requiring that attorneys undertake continuing legal education to ensure they remain informed as to recent developments in the law. Law firms can use those requirements to educate their employees on issues of professional liability and ethics. Indeed, as part of the new continuing legal education requirements, Connecticut specifically requires that attorneys complete training in ethics or professionalism.

Where law firms assume that their employees know how to respond to every ethical or risky situation, they may inadvertently be ignoring technological developments that warrant further instruction or information. For example, employees may not know how to identify a “phishing” email but, if the email is opened, it could cause serious damage to the firm.

By educating employees on these issues, mistakes are less likely to occur. In addition, regular educational sessions—whether by email or in formal training—help enhance a law firm’s reputation, particularly when it comes to purchasing insurance. Indeed, some insurers reduce premiums or provide additional perks to those firms that show evidence of taking their ethical and educational obligations seriously.

Emphasize Time Off

The practice of law can often lead to burnout. Attorneys and staff can get wrapped up in projects and work lengthy hours in an effort to comply with rigorous demands. However, law firms have an interest in encouraging their employees to take regular breaks.

Indeed, taking vacations can help attorneys and staff recharge and prevent burnout. Even though it may seem difficult to take time off from a busy practice, an employee who does not do so may suffer from stress issues and is also more likely to make a preventable mistake.

Ensuring that employees take vacation time from work is also a good way to confirm that firm systems are running the way they should. There have been many scenarios in which a corporation or firm only uncovers wrongdoing by an employee—such as financial mismanagement or embezzlement—once that employee takes time off and is replaced by a temporary employee who discovers that something is amiss.

In addition to encouraging employees to take vacation breaks from work, it is important to encourage those employees to ensure protocols are in place to make sure all necessary tasks are completed while they are away. For example, an attorney going on vacation can ensure her or his docket is cleared or handled before departing on a trip and becoming unreachable.

Law firms often do not think they will face liability as a result of an ethical breach by an employee until it happens. Taking proactive steps can reduce the risks.

Shari Klevens is a partner and deputy general counsel at Dentons US in Washington, D.C. Randy Evans is a partner at Dentons US in Atlanta, Georgia. Together, they have authored several books on legal malpractice, ethics compliance and claim avoidance.