The risks arising from mistakes by individuals in a practice, and how effective supervision can help manage these risks
Even the best lawyers are capable of making mistakes. For a practice to prosper it needs to be able to harness and develop the skills of its people, while minimising the associated risks. This involves:
- selecting the right employees and partners – see the article by Olivia Burren and Nick Worthington, “Rainmaker or cloud on the horizon” (Journal, October 2008, 48);
- providing relevant training and encouraging personal development – see the article by Calum MacLean “Training for success” (Journal, February 2010, 37);
- incorporating effective supervision into your working practices.
“At the heart of providing a legal service are the interests and needs of the client. Service standards have equal application to individual solicitors… and to firms. The application of these standards requires the use of effective systems, good training and appropriate supervision.” (Standards for Scottish Solicitors booklet, Law Society of Scotland, 2009)
47% of respondents identified supervision as one of the biggest underlying causes of claims. (Legal Business Risk Management & Professional Indemnity Survey 2011, sponsored by Marsh)
Effective supervision makes good business sense: in supporting the production of good-quality work on time it reduces the risk of claims and complaints. While there is no “one size fits all” approach to achieving effective supervision, all practices – from sole practitioner to multinational – benefit from having well designed supervision arrangements. Almost everyone would agree that supervision is important, and would probably say that they supervise junior colleagues effectively – but what is the reality?
Consider the following scenario:
Graeme Fluster was a sole practitioner undertaking a mix of conveyancing and private client work. A few years ago, pressures of work caused him to employ a two-year PQE assistant, Ernie Eegar, who took on some of his residential conveyancing work. Ernie was indeed eager to take on all the work that Mr Fluster passed in his direction. Ian also seemed very capable and never seemed to need to take advantage of Mr Fluster’s “my door is always open” assurances.
Several months later, a letter of claim arrived from solicitors representing a lender in a residential property transaction. It appeared that the borrower had defaulted on the mortgage, and after investigation, the bank is making allegations about failures in reporting in accordance with the CML Handbook.
In his letter of intimation to the Master Policy insurers, Mr Fluster expresses frustration that Ernie appears unable to provide an explanation for the apparent omission in reporting and the fact that Ernie had at no point indicated he was unaware or unsure of what he should be doing.
What risk management lessons can be taken from Mr Fluster’s unfortunate experience?
An “open door” policy alone is not supervision
Mr Fluster’s letter of intimation implied that the claim should never have happened if only Ernie had availed himself of Mr Fluster’s “open door” policy and the practice’s “informal culture”. An “open door” policy is only part of the answer – and even then, only if it is more than a statement of good intentions. A genuine open door policy complements (but arguably shouldn’t replace) active supervision.
Supervision should reflect level of experience
Making time to supervise effectively a new or junior colleague is important. New or inexperienced colleagues will require closer, more active supervision than more experienced colleagues who are familiar with the work and the systems and procedures in the practice. Ernie Eegar, as a relatively newly qualified solicitor joining a new firm, should have had, at least initially, regular active supervision from Graeme Fluster.
Supervision should not, however, simply be thought of as a process relevant only to junior colleagues. An experienced partner may be equally capable of error as a new assistant. Olivia Burren, in the October 2008 Journal article referenced above, suggested that, even with partner lateral hires, “Depending on the level of experience of the new partner and the type of work being done, it may be appropriate to have their outgoing post or emails read by someone else, at least for a preliminary period.” Providing forums for discussion of work and workloads and encouraging an open, supportive environment will also help ensure that problems do not fall below the radar.
Supervision may take a variety of forms
Supervision doesn’t always have to take the form of face-to-face meetings to review/discuss work in progress. Locating less experienced colleagues close to whoever is responsible for supervising them allows for less formal supervision and allows the junior member of staff to observe and learn from their more senior colleague.
As well as meetings and informal monitoring, a process of physical file reviews is one of the ways in which Mr Fluster might have actively supervised Ernie. File reviews are likely to be most effective when they are undertaken using a risk-based approach in which “higher risk” matters (which may be objectively higher risk or may be categorised as such because of the level of experience of the colleague concerned) are targeted for more frequent review. Ideally, file reviews should complement a system of regular update/review meetings (an agenda of discussion points, or a meeting template focusing on key measures) which enable the supervisor to check progress of particular matters at regular intervals.
Seeing incoming and outgoing mail, and being cc’d into email correspondence, may also provide a useful additional check.
More recently, since the downturn in the property market, Ernie had started taking on a number of personal injuries cases – an area of work he had undertaken for a time, and enjoyed, while with his previous firm. At the time, Mr Fluster had been delighted at Ian’s initiative and the additional income stream. He was less delighted, however, when he received a letter from McVitie Simmers & Bronte LLP intimating a claim against the firm for allowing a client’s claim to become time barred.
There was a peculiarity about the nature of the claim which meant that a two year rather than three year statutory time limit applied to this claim. A note on the file showed that Ernie had actually thought about the possibility that a two year time limit might apply but had never actually resolved the point.
What further lessons can be learnt from this experience?
Laying down the ground rules
Relying on Ernie to take the initiative and ask for help, or to refer a difficult situation or share a problem, evidently wasn’t a satisfactory approach.
It may be appropriate or necessary to prescribe what and when and how matters ought to be referred to a fee earner’s supervisor. This could be clearly communicated to new colleagues during any induction training, included as part of regular reviews and tailored training, and incorporated within transaction checklists and office procedures.
There is a reciprocal obligation on supervisors to ensure that they are aware of their responsibilities and know how to fulfil them, and supervised colleagues should be encouraged to ask for help when necessary.
Ability of supervisor to supervise
Again Mr Fluster was frustrated that Ernie hadn’t discussed with him the doubts he had had regarding the applicable time limit. But even if Mr Fluster had been more active in supervising Ian, would he himself have had the relevant knowledge to provide effective oversight of the personal injuries activities? Unless there was someone else in the practice with sufficient experience to be able to provide effective supervision, either some other supervision arrangement would have had to be established or perhaps the practice should have resisted taking on the work at all.
Practice management systems, case management systems, shared diary systems and checklists provide structured inbuilt procedural checks and, for sole practitioners, can provide an element of “self audit”. Information from practice management systems can help monitor inactivity, last activity, and levels of work in progress – all of which can help inform discussions in review meetings.
A central diary system or case management system can flag imminent critical dates – both to the responsible fee earner on a file and to their supervisor. A case management system also can act as an intelligent transaction checklist which both the supervised fee earner and the supervisor can access and review. Case management systems can incorporate checks and escalation/referral arrangements that satisfy essential supervision for certain types of work and working practices.
Embedding effective supervision into the culture of your practice has many benefits.
- It helps in building clients’ confidence in the quality of services provided to them.
- It helps individuals develop by enhancing their knowledge and skills.
- It improves morale.
- It improves efficiency and profitability.
For a firm’s supervision arrangements to be most effective, they should:
Calum MacLean is a former solicitor in private practice who works in the FinPro (Financial and Professional Risks) National Practice at Marsh, the world’s leading insurance broker and risk adviser. For a user name and password to access the Marsh’s solicitors’ website, contact firstname.lastname@example.org.
The information contained in this article provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisers regarding specific coverage issues.
Marsh Ltd is authorised and regulated by the Financial Services Authority.
- start at the top and be reflected in the culture of the practice;
- be embodied within the practice’s written procedures;
- form part of induction and training;
- be supported by effective coaching and training skills of those who have supervisory responsibilities.
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