California
Attorney Ethics Counsel

February 25, 2016

Mistakes were Made? Learn from the Post-Mortem Analysis

Assume that your firm has made a mistake that led to an ethical lapse: a conflict of interest with no informed consent, or a similar misstep.  Once the actual fallout from the situation subsides, from a compliance perspective the relevant question is whether you can learn from these circumstances and avoid similar issues.  For any law firm in similar situations (and there are many, since California law firms deal with similar issues nearly every day) if it appears that your firm may have made mistakes that led to ethical lapses, once you move beyond the paranoia and anxiety phase it is critical to conduct a thorough and objective post-mortem analysis to prevent similar occurrences in the future.  To do this, you must ask, and answer, some potentially difficult questions.

What specific mistakes did we make?  In the cold light of day, and with the benefit of hindsight, it can seem easy to identify specific mistakes that led to potential ethical lapses.  But it’s not as easy as it might at first appear.  Most ethics mistakes, thankfully, are not outlined in excruciating detail by a court order.  And even if the issues are clearly defined, reasonable minds may differ on how ethical issues can, and should, be resolved, since there are many gray areas in the rules.  Add to this the fact that there are compelling commercial realities that can lead to glossing over ethics issues, if they are left unchecked.  The result is a difficult, but critical, inquiry.  You must analyze what specific mistakes you may have made, and detail the reasons why you made them.

What changes are required to prevent similar mistakes in the future?  The next inquiry is whether, and how, you can prevent similar mistakes in the future.  Everything should be on the table.  What do your engagement letters say, what does your fee agreement provide, and do they need to be revised?  What is the process in place for attorneys to identify and to resolve conflicts of interest, and does it need to be revised? Are there objective checks and balances in the conflicts processes, so the attorneys handling the matter are not the final word on how the issues are resolved?  What additional safeguards can be implemented to add layers of protection for the firm?  What technology can assist with preventing these issues from slipping under the radar?

It is possible for the firm to make the necessary changes?  We often paraphrase the cliche that it is impossible to solve a problem in the same mindset that created it.  As applied to law firms dealing with the aftermath of a potential ethical lapse, this means that the firm must make an objective analysis about whether it can identify and solve the problems that led to it on its own.  It may be possible for the firm to conduct its own internal review, or it may be necessary to engage outside ethics counsel to obtain the appropriate level of objectivity required for an effective review of the firm’s actions, and to outline a detailed plan to make the necessary changes.