Disaster Recovery Plan Can Help You Manage Risk
Even when disaster occurs, attorneys still owe professional and
ethical duties to clients. Limit your exposure to claims of negligence
by developing and using a disaster recovery plan.
by Ann Massie Nelson
Ann Massie Nelson is a
regular contributor to Wisconsin Lawyer and communications
director at Wisconsin Lawyers Mutual Insurance Co.
WHEN TERRORISTS STRUCK the most prominent icon of American commerce,
the bittersweet irony was that business continued, even amidst massive
destruction and loss. Many corporations and agencies located in or near
the World Trade Center credited their viability to disaster recovery
plans, many of which were developed in anticipation of Y2K.
Wisconsin's pastoral setting seems far removed from terrorist
targets, yet we need look no farther than our own borders to see that
tragedy spares no one. In the past year alone, a tornado ripped through
Siren and a flood submerged the Prairie du Chien business district. A
major ice storm left many homes and businesses in southern Wisconsin
without power for up to two weeks in 1976. And, who can forget the
hazardous chemical spill that turned Weyauwega into a ghost town or the
cryptosporidium that contaminated Milwaukee's water supply?
Events like these compel us to question our own disaster
preparedness. Look around your firm and imagine the worst possible
scenario: everything you see - files, computers, office equipment,
furniture, calendars, Rolodexes - destroyed.
- How would you fulfill your professional and ethical obligations to
clients in the days, weeks, and months ahead?
- If you were unable to practice for any reason, how would your firm
manage?
- Could failure to plan for a business interruption be cited as
negligence in a professional liability claim?
Consider the following measures to help your law firm continue to
serve the needs of your clients.
Adequately Insure Your Firm
Insurance provides the financial resources you need to begin
rebuilding your practice as quickly as possible. Many small- to
medium-sized businesses purchase business owners' policies that combine
property, commercial liability, and business interruption coverage into
one. Business interruption insurance typically covers loss of income due
to direct loss of physical property. Coverage for income lost as a
result of an indirect loss, for example, a power outage, may have to be
added by endorsement.
Review your insurance policies or talk with your agent to make sure
your bases are covered. You might also consider:
- Extra expense insurance to cover the additional costs - above your
normal operating expenses - that you incur to keep your practice open
while your building is shut down. For example, you may need to rent
temporary office space and computer equipment and install phone lines.
Often, business interruption and extra expense coverage are sold as a
package; however, extra expense coverage alone may be sufficient,
according to the Insurance Information Institute.
- Valuable papers insurance to cover the costs of restoring or
replacing documents for which no electronic or paper duplicates
exist.
- Known dollar deductible or reduced waiting period, based on your
financial ability to share in the risk. Many policies have a waiting
period, which can be as long as a week or more, before coverage begins
for expenses and lost income.
Back Up Everything, Every Day
A good, basic business practice is to back up all of your electronic
records every day. Make sure you also have copies of your operating
system available to retrieve the data. Store the backup disk or tape in
a secure, off-site location. Periodically test your data retrieval
abilities off-site to ensure you have the proper equipment and software
to restore your electronic files. A duplicate set of backup tapes stored
in a second location provides further security, in the event that the
first set is destroyed or inaccessible.
Paper or electronic duplicates of calendars, docket, and contact
information for clients, opposing counsel, and courts could be
invaluable in a crisis. (See "To Learn More" for Web sites that discuss
this topic in depth.)
Develop a Written Disaster Recovery Plan
Every law firm needs a written disaster recovery plan, with copies
filed safely off-site. In a small organization, one person typically is
responsible for compiling, updating, and executing the plan. Review the
plan with all employees and distribute copies for them to keep at home.
Elements of a disaster recovery plan include:
- Evacuation procedures.
- Two meeting places where employees can gather - one outside your
building, the other well away from the office - take a head count,
assess injuries or damage, listen to news broadcasts, and plan for the
immediate future.
- A current directory of employees, including home and cell phone
numbers, pager numbers, home email addresses, street addresses, and
names of emergency contact persons.
- One local phone number for employees to call for information or to
report their situation. List a contact person outside your area to
notify by cell phone if local phone service is interrupted.
Your firm's managing partner or administrator will need additional
information, such as:
- Copies of your firm's insurance policies, including policy numbers,
agents' names and telephone numbers, and instructions for filing
claims.
- Location of office space you can access immediately for temporary
operations. Consider working out a reciprocal agreement with another law
firm or your accounting firm. Be sure to include a map in addition to
the street address. After a tornado, street signs and familiar landmarks
may be gone.
- A copy of your lease and the name and phone number of the office
building manager, if applicable.
- An up-to-date inventory of all office equipment, including model and
serial numbers, purchase dates and prices, service contracts, and
leasing information. This information will be extremely helpful in
filing a claim with your property insurer and replacing the equipment
you need.
- The location of computer equipment for restoring data, along with
the location of your off-site backup disks or tapes.
- Detailed records of firm income, accounts receivable, payroll, and
other documentation for filing a claim under your business interruption
insurance.
- A recent valuation of your firm property (building and contents) for
filing a property insurance claim.
Keep Some Essentials on Hand
When disaster strikes, you may be glad to have a few basic essentials
on hand, such as:
- File storage that can be locked. Your duty to maintain client
confidentiality continues, even during a disaster. Consider locking your
file cabinets at the close of every work day.
- Cash for purchasing emergency supplies and equipment. If the
electricity is out, automated teller machines (ATMs) will not work.
Neither will cash registers. If you have cash, you may be able to buy
what you need. Keep receipts of all purchases for filing extra expense
insurance claims.
- Tarpaulins, plastic sheeting, heavy-duty tape, plastic storage
boxes, freezer paper (for separating and protecting irreplaceable
documents), and other supplies. If a disaster is widespread, you may
have difficulty buying these supplies off the shelf. Your property
insurance policy requires you to protect equipment and records from
further damage.
- A battery-powered radio, flashlights, extra batteries, fire
extinguishers, a well-stocked first aid kit, and bottled water.
Remind Employees to Use Common Sense
Even a 15-minute wait outside on a winter day in Wisconsin can be
dangerous without a warm coat, hat, and gloves. And, anyone who saw the
videotape of women attempting to run from the World Trade Center in high
heels recognizes the value of keeping a pair of walking shoes under the
desk. Employees also should know to take their wallets and car keys with
them in an emergency evacuation. They might not be able to return to the
building, but they may be able to drive to safety. Finally, remind
employees that their personal safety is paramount. When it comes to
serving the needs of your clients, nothing is more important than your
people.
Wisconsin
Lawyer