California
Attorney Ethics Counsel

December 07, 2015

5 Legal Ethics Compliance Systems to Review Today

Ensuring that every element of your practice complies with the highest ethical standards is not just required, it is also good business. Or, to be more specific, permitting an ethical lapse is very, very bad business. A review of these systems may lead to more questions than answers. But asking the right questions is the critical first step. Consider these 5 critical compliance systems in your law practice: firm management; clients and matter management; calendaring and deadlines; information management; and financial management.

In your firm, are all of these systems in place and performing as they should, as part of a complete ethics compliance protocol?

1. Firm Management. Your practice should have a signed Partnership Agreement, with compensation structures in place that incentivize partners and other attorneys at the firm to think about and comply with all ethical requirements. Your firm’s governance should be set up so that you spend sufficient time to monitor compliance with these requirements, and to ensure an appropriate response in the event of an ethics question or a potential ethics issue.
2. Client and Matter Management. Your practice should have systems in place to identify and to resolve client conflicts, to protect client confidentiality, and clearly outline and document each of the firm’s engagements. A robust conflicts database is essential, but it is only a starting point, since any system is only as good as the information that goes into it and only works if it is used consistently and uniformly. Many conflict issues arise from latent conflicts (a subsidiary vs. parent conflict, for example) that may not be obvious on the face of a conflict search. Ensure that your systems are properly set up, and are being used, and used in the right way.
3. Calendaring and Deadlines. It should go without saying that a sophisticated calendaring system to monitor all firm deadlines is essential. However, also consider the methods you use to double-check entries, to ensure that specific attorneys have responsibility for accuracy, and to ensure that you are properly anticipating deadlines. Ensure that your system is durable and can be accessed in the event of a significant disruption, like an earthquake.
4. Information Management. Client confidentiality in California is not a gray area: you must keep client information confidential. This means that your firm must have sufficient systems in place to ensure that information is secure. Analyze whether your information security policies are sufficient (what rules exist regarding laptop security, thumb drives, saving documents in the cloud, for example). Analyze whether attorneys and staff are following the policies. Consider whether your firm’s technology is sufficient to prevent a breach, and/or to respond to one if it occurs.
5. Financial Management. Review your trust accounting procedures and safeguards to ensure that client funds are handled properly. The rules are quite clear about what you can, and cannot, do with these funds. Ensure that your attorneys and staff are properly trained to identify appropriate issues and to handle these items properly. Separately, consider any alternative fee arrangement from an ethical perspective: does the arrangement place the client’s interest in conflict with yours? does the arrangement incentive something that could be an ethical concern (e.g., incentivizing attorneys to spend as little time as possible on a case)? is the arrangement properly documented, to avoid ambiguity when bills come due?