Wisconsin Lawyer: What Keeps You Awake at Night?: What oversight should I provide the office manager with respect to office expenditures?:

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    What Keeps You Awake at Night?: What oversight should I provide the office manager with respect to office expenditures?

    Our office manager takes care of payroll and disbursements. What steps should I take to keep an eye on the office manager’s activities with respect to office expenditures without making her think I don’t trust her with the firm’s checkbooks and credit cards?
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    Wisconsin LawyerWisconsin Lawyer
    Vol. 81, No. 12, December 2008

    What Keeps You Awake at Night?

    What oversight should I provide the office manager with respect to office expenditures?

    Our office manager takes care of payroll and disbursements. What steps should I take to keep an eye on the office manager’s activities with respect to office expenditures without making her think I don’t trust her with the firm’s checkbooks and credit cards? 

    Sidebars:

    Warning Signs Learned the Hard Way

    Julie A. 
Anderl

    The light bulb should go on if any of these oddities happen in your office:

    1) Your legal assistant dashes out the door to greet the mail person as he or she crosses the road to your office. (You later learn the assistant shredded mail she did not want you to see.)

    2) Your legal assistant dashes for the telephone no matter what she is doing, even if she is in the bathroom. (You later learn she was controlling all of your phone calls.)

    3) You notice that you are not getting your CaseLaw ExpressTM email from the State Bar and wonder why. (You later learn your assistant had control of your email and deleted items he did not want you to see.)

    4) Your legal assistant never takes time off or vacation when you are in the office. (You later learn he came to the office to look at mail every morning you were on vacation and thought he was, too.)

    5) Your legal assistant, who also keeps your books, does not have your materials together so that your accountant can complete your tax returns, because the computer ate them. (You later learn the assistant was stealing from you.)

    These are a few examples of odd behaviors that my legal assistant exhibited, and I soon learned she was embezzling from me. If this has happened to you, you are not alone. I learned that embezzlement is on the rise and long-time, trusted employees are not exempt.

    I learned several techniques during this experience that may help you avoid the same result:

    First, personally review all of your mail, and tell your employees to not open your mail. This does not help with automatic withdrawal payments, so have that information emailed to your home. Ask the post office to hold your mail if you are out of the office on vacation, or have a trusted colleague, who has no conflict of interest with your cases, review your mail in your absence.

    Second, because anyone can forge your name if they have access to your checks, keep your blank checks in a fireproof lockbox in your office with you controlling the only key. It may be cumbersome, but it will keep your hard-earned money safe. Having just you as the signatory on the checks is not foolproof, because the bank may overlook the requirement.

    Third, have your accountant audit your books annually. There are many ways a clever employee can steal your money.

    Fourth, have the person who handles the money in your office bonded.

    Fifth, the person who enters information into your bookkeeping records should not be the person who does the reconciliation. I currently have chosen my husband to enter the information and my mother to do the reconciliation. (Yes, I am gun-shy now.)

    Julie A. Anderl, Anderl Law Office LLC, Chippewa Falls

    Be Proactive and Have a Clear View of the Result Wanted: Integrity

    James H. 
OlsonA few years ago, Stephen R. Covey wrote a best-selling book entitled, The Seven Habits of Highly Effective People, Restoring the Character Ethic. In it, he wrote the first habit is to be “proactive” and the second is to “begin with the end in mind.”

    Be proactive. Most lawyers act or want to act with the highest ethics and integrity. Your success in the law business depends largely on your integrity. As an attorney, you are the professional in your office. Your law office is your business to run in the manner that you want and need. It is up to you to set the goals, procedures, and objectives for the firm. The integrity of your work product and your relationships with clients, colleagues, and the courts are of the highest importance. So, be proactive and set the parameters for integrity.

    A few years ago our trusted office manager embezzled money from our firm, leading to her eventual prosecution and conviction for felony theft. From that experience, we learned some hard lessons. First, never let anyone other than you sign bank checks. Second, never let the office manager have access to both the money and the bookkeeping system. Third, follow the money, and never let anyone else make bank deposits. This means no one other than you (or your spouse). Fourth, hire a very competent accountant to set up and review your books of account, and install a system of checks and balances. Forget about the “extra” cost. Be vigilant. Remember, it is your business and your integrity that is on the line every day.

    Begin with the end in mind. What steps should you take without making your office manager think you don’t trust him? Begin with the end in mind, which is a highly ethical practice with the highest integrity. You must instill that concept of high integrity in your office manager. Let me assure you that if your office manager, or you as an attorney, lack integrity, you will suffer as a lawyer. If your office manager steals money from you or your clients, you not only lose that money, and those clients, but also respect and integrity in the community. That is just the way it is.

    Therefore, it is up to you to deal simply and honestly with your office manager. Have your accountant set up good procedures. Be forthright in instilling in your office manager the concept that integrity is for her benefit as well as yours, your clients, and the community. Be proactive and begin with the end in mind. Do not wait for something bad to happen. Do it today.

    James H. Olson, “The New” Olson Law Offices LLC, Beaver Dam

    Supervising Lawyers Have Ethics Obligation for Employees’ Conduct

    Dean R. 
DietrichLawyers are obligated to properly supervise employees who work with them as part of their law practice. SCR 20:5.3, entitled “Responsibilities Regarding Nonlawyer Assistants,” provides that “a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s (nonlawyer) conduct is compatible with the professional obligations of the lawyer.”

    In addition, a lawyer is responsible for the conduct of a person if the conduct would be a violation of the Rules of Professional Conduct if the lawyer engaged in the conduct and either the lawyer has knowledge of the conduct or knows of the conduct at a time when its consequences could be avoided but fails to take reasonable remedial action. In other words, a lawyer is responsible for the staff members who work in the office, and if the conduct of a staff person is a violation of the Rules of Professional Conduct, the lawyer may be responsible for that conduct if the lawyer knows of the conduct or fails to take action after knowing of the conduct. Thus, if an office manager steals funds that belong to a client, such conduct would be in violation of the Rules of Professional Conduct, and the lawyer may be responsible for that conduct.

    In addition, SCR 20:5.3 places a special obligation on the lawyer who is in charge of the office, whether the lawyer is a sole practitioner or a member of a management committee. A lawyer with such responsibility “shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person’s conduct is compatible with the professional obligations of the lawyer.” Thus, a lawyer who serves in a management capacity or is an owner of the firm must make sure that proper measures are in place to ensure that the office manager is acting in the same manner that the lawyer must act when making decisions about the office operations. All of these requirements, of course, have a reasonableness standard, and so the lawyer must have reasonable measures in place to ensure that the office manager is properly handling office expenditures and especially to ensure that the office manager is not misusing office funds or client funds.

    Dean R. Dietrich, chair, State Bar Professionalism Committee, Ruder Ware L.L.S.C., Wausau




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