People problems

'He was my trusted partner for 18 years. It never crossed my mind that he was dishonest. Over £650,000 is missing from the client account. How could he have done this to me?'


'When interviewed, she said she was an experienced matrimonial lawyer. Now it is clear she was useless and we have three substantial claims.'


'He was a real rainmaker. The fees he brought in were enormous. I never questioned who he was acting for and exactly what type of work he was doing. Now we are being investigated by the police and Law Society in relation to mortgage fraud.'


Some of these sad tales, which were recounted to claims handlers by shell-shocked partners, confirmed that it is not just clients who are a potential danger but everyone working in the firm, from partner to post-clerk. A number of steps can be taken to ensure that these risk exposures are managed.


Tighten your recruitment process. Make sure applicants are as good as they say they are. Set them a problem to resolve relating to their stated area of expertise. Check that they hold the qualifications they say they do, and investigate any obvious employment gaps in their CVs.


Do not simply rely on what applicants say or, indeed, what their former employers say. Make your own enquiries, for example, from clients or other lawyers who may have dealt with them. Ask to see their practising certificates - contact the Law Society if there are any conditions attached to them.


While there has to be trust between partners, it should not be blind trust. The same applies to other members of staff. There must be a degree of supervision in relation to both work and financial issues. This may be achieved through file reviews, tight accounting procedures, and regular reviews of the work they have carried out.


Keep an eye on complaints and claims. If an inordinate number are originating from one individual, team or department, then investigate. Do not simply accept explanations at face value.


Just because someone earns the most fees, does not necessarily mean they are the most successful. That person may be exposing the firm to unacceptable levels of risk through bad working practices.


When an employee hands in his resignation, he should not take on any new matters. Instead, that person should be asked to concentrate on tidying existing matters and asked to identify any problem files that might require remedial work. Consider whether a file audit should be undertaken.


If it is necessary to dismiss an employee, a full audit of that person's work should be undertaken immediately. This applies to employees other than fee-earners, such as accounts staff or secretaries.


This column was prepared by AFP Consulting, a division of Alexander Forbes Risk Services UK