For all law firms, receiving an allegation of negligence and/or a complaint is unpleasant but, also the reality of being a service provider. As much as firms will always try to get things right, mistakes can and will happen, but how can these risks be minimised and controlled?

Prevention is always better than cure, and we will address some of the musts that a firm should have in place to avoid Negligence and Complaints are as follows: –

• New Matters – Ensure that you are able to provide the legal service that your client requires. If your firm does not have the skillset and experience, you really should decline the instruction. Firms who take matters on in areas of law they do not understand put themselves at significant risk, and often, relying on Counsel for the experience does not meet the requirement. If you do not have the experience of the area of law, the advice is to decline the instruction. However, this does not mean you need to lose the client. You can assist the client with finding a firm that can help and facilitate an introduction and subsequently retain some control over your relationship. The same also applies when a matter brings a level of complexity that, again, you do not have the experience to handle. Whilst you may be able to seek the advice of Counsel with certain issues, if the whole matter falls outside of your expertise, then passing the case to another firm is often the right decision. Do not dabble in areas of law that you do not understand. If it goes wrong, your Insurer will not be impressed, particularly if the matter is high risk or high value.
• New Clients – Decide what clients your firm will take and what features will influence your decision whether to take on a new client or not. For many firms, certain clients simply increase risk to a level that the firm (and your insurer) may not be comfortable with. The AML Regulation 2017 gives guidance on high risk clients, and your firm should, as part of its annual regulation 18 risk assessment, decide on whether you will or will not accept work from such clients: –
• • Politically Exposed People (PEPs) including relatives and known associates
  • Clients who are sanctioned
  • People who reside in a sanctioned country
  • People who reside is a country known for high levels of corruption
  • Designated people (as define by the Terrorist Asset-Freezing Act 2010)
  • Those convicted of serious crime or fraud
  • Celebrities or High Net Worth People

All these types of people are considered to be of higher risk. Your firm needs to decide if you have the experience and ability to represent them and if you do, make sure you comply with the requirement of the regulations.

• Know Your Client – closely linked to the previous point in KYC, not only is KYC a requirement of the SRA Code of conduct (code 8.1), but knowing your client is more than just understanding who you are dealing with. Make sure you know sufficient information about your client to confirm if you can or want to act.

• Client Care – ensure your client care letter sets out in sufficient detail to whom you are providing your services, and what service you have been asked to provide (Scope of Works). Firms that do not take the time to set out the terms of their retainer and the service they will provide, put themselves at risk. If a complaint arises and your scope of works is not clear you risk the regulator finding against you. Spend time on your scope of work and make sure both you and the client are clear on where your service starts and stops for the fees provided.

• Supervision – Make sure the firm has very clear and documented supervision procedures. Ensure your staff know how they will be supervised and their obligations, and how your supervisors must supervise them. Firms will approach supervision in many different ways, and whichever way your firm approaches supervision at case, department and firm level, document it and make it clear. Introduce supervision touchpoints where staff are expected to seek the guidance of a supervisor even if they feel they know what to do (for example, a litigation matter being set down for trial or before an exchange on a property matter). Also, you must ensure your supervisors are accessible and have the proper time to supervise. Being too busy to provide your staff with supervision time is not a defence to the criticism from the regulator or your insurer.

• New matter allocation – or most firms building a client relationship is important. You want your staff to engage with clients and get them to return when they need your services again. Service provision and repeat work is your cheapest form of marketing. However, this brings risk. A client who approached one of the staff directly is likely to bypass any systems you have in place to allocate files to the correct person, and you are reliant on your staff member to tell you that the new matter has arrived. While this is not easily achieved in a law firm, it has to be addressed. Work coming into the firm which has not been adequately profiled is a risk and having a procedure for ensuring a supervisor approves all new client and matter openings is essential. For example, firms should undertake a risk assessment at the start of each matter. If these are required to be approved by a supervisor, this would be the time to check if the handler is the correct person or if the firm should be taking the matter on. Fail to do so, and you risk new clients and matters being opened that the firm or the individual may not have the competence or time to service.

• Experience – When allocating a file or undertaking file reviews, ensure that the individual who has been allocated the matter has the required experience. If they do not, ensure they are supervised fully (perhaps have them working alongside a Partner) or re-allocate the file. Supervision in a requirement of the SRA and an effective supervision structure is a must for all firms as identified above. However, firms must also ensure they have the time to dedicate to supervision and where that may not be possible due to the time involved removing files may be the answer. However, people need to learn, and through learning, both they and the firm grows, but where an inexperienced member of staff is leading a file or task, they have to be managed effectively.

• Update your costs estimates – A significant number of complaints are about fees, which usually are due to a fee estimate being exceeded and not updated or the service running far beyond the scope of work (or the scope of works not being clear). It is an absolute must for firms to ensure they review provided cost estimates. In the event fees need to increase, firms must tell the client in advance with a full explanation. Equally, if the terms of the retainer have changed, and fees need to change accordingly, explain this to the client so they have a complete understanding. Most complaints about fees can be avoided through open communication and ensuring there is an understanding when things change.

• Files Reviews – Essential to a supervision structure is file reviews. These are often seen as a burden, and some firms end up reviewing simple and straightforward matters simply to ‘tick boxes’ and show that files reviews are completed. It is better to identify the time your supervisors have available to audit files, and then direct the files reviews to appropriate cases. The reality is that files reviews are split into 2 areas – process reviews to ensure an individual follows the firm’s procedures and technical reviews to ensure that the matter is handled correctly. Different people can complete these audits as they require a different level of knowledge. File reviews can also occur from supervision touch points, referred to above or by keeping and retaining a list of high risk cases and ensuring these are reviewed as part of your process. There is no harm in seeing the same file on more than one occasion if it is considered to be of higher risk.

• Technical Training – Have a process for delivering formal training with the firm. Ad hoc and ‘leave it to the person’ approaches are not ideal. Law changes from time to time, and with every change, your staff need to be aware of how to respond. Every firm and individual has a duty to ensure they get appropriate training to comply with the requirement for continued competence. Having a structure to identify, approve and deliver training tends to ensure training needs are identified and met. Also, ensure that all training and learning is captured in a training record. The SRA expects firms and individuals to monitor and record training and have told the industry they will be asking for evidence of continued competence. Do not get caught out by not recording it.

• Service Training – Ensure your staff know how to service a client. It is possible to teach service delivery, and building relationships with clients is essential to the overall delivery of service. Ensure your staff know how to engage with a client, when to change their approach, how to respond and deal with issues as they arise, and when to seek supervisor guidance. As a firm, you will have clients from all walks of life, and they will all have an expectation for how they expect your service to be delivered. Adapt your style to meet your clients’ needs and ensure that your staff know how to do that. Communication is also successful to service delivery and ensuring your client is aware of what you are doing is essential even when there are delays!

• Management Information – Use management information to your advantage. Your firm will possess a lot of data and hopefully has the ability to report on your matters. Having regular reports that help you identify when there may be an issue can direct your supervision time to the right cases. For example

• • Cases with no activity for 30 days or more – may indicate an issue with the file and identify delays.
  • Complaint follow-ups – re-review a compliant file to make sure all is ok.
  • Unpaid bills – may indicate a complaint is coming
  • Missed key dates – likely to result in a complaint or an issue for a firm
  • Limitation approaching – review a file when the limitation is close up to 6 months before

There are a number of indicators for when a matter may need attention and if you have the ability to generate a report to highlight the issues, you can then direct them to the suitable supervisors.

• Reporting –   Ensure that your staff know to report any allegations of negligence or complaints immediately and whether or not they feel the issue is justified. It is well established that not addressing issues as soon as they arise tends to make them deteriorate. Staff need to feel confident in being able to refer issues immediately and not be fearful of doing so. Address the issues first and then deal with any consequences. All firms need their staff to raise and discuss issues and to do so quickly. This enables supervisors to respond, hopefully address the issues, and either solve or minimise the problem. Remember that there is an obligation to report a client to insurers as soon as it is known about and failure to do so may bring consequences.
• Analyse – At periodic intervals, take the time to review and analyse complaints and negligence. Look for trends, whether that is people, processes, or service areas, and devise a plan to address any arising issues. Also, give people feedback, if a mistake has been made, let the individual know why it went wrong and how to avoid the issue from arising again. Analysis can also assist in developing a training programme that reflects your firm’s needs.

The reality is that with most complaints and allegations of negligence, the post ‘error’ assessment clearly demonstrates how it could have been avoided. This is not always going to be practical but by giving some thought to management and supervision, directing resource, providing training, and acting quickly damages can be minimised and controlled.

About The Strategic Partner

The Strategic Partner is a law firm knowledge hub. We work with both law firms and professional indemnity insurers, advising and guiding on risk management techniques to assist and reduce instances of claims or regulatory breaches.

We offer a range of services and consultancy tailored to the Legal sector. We have gained a wealth of knowledge and experience in the overall management of law firms and work with them to achieve profitability, stability, and efficiency. Our goal is to become a valued and respected partner to our member law firms providing high-quality services and solutions at all times.

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