Getting out of bed involves “risk” which is sometimes described as exposure to some possibility of loss, injury, or other unwelcome circumstance (Oxford English Dictionary). We accept and deal with all manner of risk on a daily basis and the common law standard of not properly addressing such risks was the reasonable man concept as to what was negligent conduct.
We all purposefully take some risks with things like food at the company picnic and investments (standard printed language from all brokers is: “Past performance does not guarantee future results.”). It is all just part of life, but we are always advised to manage our risk and avoid things like known health risks, home and personal security risks, and other known and predictable root causes. Therein lies the foundation of the insurance industry made famous in the small Edward Lloyd’s Coffee Shop (1648-1713) in London when ships and their cargo were “insured” against the risk of loss, later leading to the London insurance market.
So, in the modern world of International Standards (ISO 31000), we seek to take the effect of uncertainty on objectives and use coordinated and economic application of resources to minimize, monitor and control the probability of unfortunate events. Enough: It is what your Momma told you when she said to watch where you were going and pay attention to what you are doing. Without something like ISO, that was Mother’s Risk Management.
Translated to the world of hard-working lawyers with too little time, it is now necessary for you and your firm to start paying more attention to yourself and your own legal risk. The phrase “the cobbler’s children have no shoes” is used to describe the phenomenon when professionals are too busy with their work and clients to look after those close to them [lawyer with no will; the contractor whose house is unfinished; the accountant who was late filing her return].
Most lawyers have the good sense to have errors and omissions coverage, or malpractice coverage, but that is not the real answer. The solution is not to get to that point, which will be costly and painful regardless of the coverage. Risk management in the form of legal loss prevention is the medicine you should take and accept as a business practice. In other words, get the family some shoes.
Intapp, a legal software provider, http://www.intapp.com/open, sponsored a 2014 Law Firm Risk Survey and inquired of the biggest firms. Some 96 U.S. firms responded on various issues posed. Risks in all size law firms change often and they were interested in seeing these changes since their 2012 survey. They made several observations from their key findings:
- More than half the responding firms were using centralized process to identify and protect HIPAA protected health information.
- Half were planning to upgrade their conflicts software in next 12‑18 months in response to those continuing challenges.
- Major concerns of the respondents were conflicts and information security.
- About half reported client audits of the law firm’s security and risk procedures.
- Law firms seemed to have more stringent process for new business than for new matters from existing clients.
- More than half had an organized central arrangement to check conflicts.
Contact: [email protected] for detailed results.
See also on this site: November 26, 2012 “Mistakes were Made”; and December 10, 2012 “You Need a Loss Prevention Lawyer”.
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