Risk management

Look before you leapSolicitors often tell their professional indemnity claims handler: I should never have taken that client on, I knew from the start...Look before you leapSolicitors often tell their professional indemnity claims handler: I should never have taken that client on, I knew from the start that he was going to be trouble.

That of course raises the question: so why did you?Client vetting is absolutely fundamental to effective risk management.

Always ask the following questions: Who is the client?A simple enough question, but one that is often overlooked.

Problems often arise in the situation where there are multiple clients, for example, partnership transactions or a husband and wife.

In both cases there are more than one individual whose interests need to be protected and who will require proper advice to protect those interests.

Always be alert to conflicts of interest in such situations.

A conflict may be apparent at the outset, but you should also stop and consider how likely it is that a conflict may arise in the course of the retainer.Why are they instructing me?Be alert to fraud.

Where does the client come from? Why is an individual based in, say, Newcastle instructing me, a solicitor in Oxford, to act in the purchase of a property in Torquay? If you can get a satisfactory answer, all well and good.

If not, then there may be fraudulent implications to the transaction.

Every practice should have an established procedure with regard to identifying money laundering.

If you do not, get one in place as soon as possible.

Dont say, it will never happen to me, ask yourself why not me?Am I able to act for them?You must ascertain the clients needs and requirements.

Also establish the clients expectations.

Then consider whether you can meet them.

Do you have the skill and expertise to undertake the work? Do you have adequate resources and time to meet the clients expectations? A properly structured interview with the client will help you to establish these points and to reach a decision.Do I want to act for them?You are under no obligation to act for a client.

It is up to you.

Where the problem arises is after you have taken the client on, as there are only limited circumstances in which you can terminate the retainer.

Certain situations may require careful consideration:l Clients who have instructed previous solicitors in the same matter;l Last-minute instructions: limitation expires tomorrow, the auction is this afternoon, drafting a deathbed will;l Clients who have previously complained or sued the firm.There is no rule that you should not act in such situations.

But is it in your best interests and indeed those of the client for you to act? Remember that as soon as you agree to act, a duty of care is created.l This column was prepared by the St.

Paul risk management team