Risk management

Fear is the key

People make mistakes every now and then.

The problem with a mistake in a legal practice is that without careful handling, what started as a minor error can end up as a notification of circumstance, or even worse as an actual claim for negligence against your professional indemnity insurance.

Last week, in discussing claims management (see [2002] Gazette, 10 October, 40), we touched on the importance of making sure each practice has a nominated person to act as a claims co-ordinator.

This ensures that a practice can monitor claims accurately and identify areas which may benefit from more risk management input to reduce the number of claims and circumstances.

While appointing a single co-ordinator is good in theory, it is, frankly, often harder to implement in practice.

Almost without exception, claims are co-ordinated through a partner of the firm and in many cases through the senior or managing partner.

No one likes to admit to error, and it is easy to see why a junior solicitor, associate or clerk may prefer to hope their mistake goes unnoticed rather than knock on a partner's door and admit culpability.

How different firms overcome this potential problem area will vary from practice to practice.

Ideas include adopting an 'open-door' policy to ensure it is easy to notify mistakes to the co-ordinator, or appointing an approachable claims co-ordinator who reports onwards to the senior partner.

Alternatively, adopt a 'no-blame' culture to ensure that even junior staff are aware they can admit to error without fear.

Adopting a no-blame culture does not mean a practice should accept shoddy or slapdash work.

Poor quality professional practice can still be addressed through the staff appraisal procedures, or by implementing more stringent risk management controls.

It simply means that otherwise high-quality staff can learn from mistakes - and those areas of weakness can be quickly identified and rectified.

When implementing an open-door policy towards claims notification, it may be worth considering a confidential staff opinion survey to establish employees' attitudes towards the firm.

This may sound over the top, but hopefully you will discover that all staff are content, view the firm positively, and have relationships built on trust with their colleagues.

On the other hand, you could discover that some areas of the firm have employee-relationship difficulties, or that some staff live in fear of dealing with the claims co-ordinating partner.

You may also learn some tips about changing procedures and reducing the practice's claims notification record.

Establishing effective risk management procedures and controlling and reducing claims against a practice is as much a cultural issue, as it is a procedural process.

Making sure your claims co-ordinator is accessible and approachable is a useful step.

This article was prepared by Alexander Forbes Professions risk management team