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    Wisconsin Lawyer
    March 01, 2012

    Managing Risk: 8 Ways to Freshen-Up Your Risk-Management Procedures

    Jimmy the Groundhog predicts an early spring, which is a good time to open some windows and take a fresh look at your risk-management procedures.

    Thomas J. Watson

    Wisconsin LawyerWisconsin Lawyer
    Vol. 85, No. 3, March 2012


    How are you doing in preventing malpractice claims?

    Most sole practitioners and lawyers in small firms to whom I talk think about risk management from time to time – usually in the context of a case they are working on or a sticky issue they are trying to resolve. Unfortunately, it is less common to find lawyers thinking about risk management in a proactive manner.

    This article looks at eight categories of risk management applicable to your overall practice. Take the time to truthfully assess how you think you are doing in these categories. Improving your risk-management strategies may help you keep clients, save money, and avoid being the subject of an Office of Lawyer Regulation complaint or a malpractice claim. It may even make you a better lawyer.

    1) Office Management

    One goal in managing your practice should be to use and keep track of your time and energy so that you maximize your effectiveness. Work on being organized, but don’t let it consume you. Here are some questions to consider.

    • Do you have procedures or policies for handling and storing incoming documents, whether they arrive the traditional way or electronically?
    • Do you have a policy on using email? What steps do you take to ensure confidentiality of email or smartphone communications with clients?
    • Do you use checklists and a tickler system?
    • Are you knowledgeable about law office technology and aware of software possibilities for docket control, time and billing, and other systems?
    • Do you support your staff through training and education, professional development, individual feedback, and regular office meetings?
    • Do you explain to each new employee and new associate the office’s policies and procedures?
    • Do you have an employee policy manual?
    • If you share office space with other lawyers, is there any aspect (shared signage, phone answering personnel, letterhead) that might reasonably lead a client to believe that a partnership exists?

    2) Case Management

    Keeping up with open cases is crucial. The attorney’s failure to meet deadlines is one of the most common mistakes alleged in malpractice claims. Include dates for automatic reviews in your tickler files, and schedule meetings with office associates or staff to discuss the status of active cases. If you do those things, you have a good foundation for avoiding scheduling mistakes or just plain procrastination on cases that need some attention. Here are some other questions to consider.

    • Do you follow a standard procedure for opening files that includes indexing, conflicts checks, and calendaring deadlines?
    • Are your case files stored at a central location in safe, secure cabinets? Are electronic files secure?
    • Are all files well organized and easy to understand?
    • Do you have a standard file-closing procedure? Do you have a procedure for sending written notice to clients, remitting a final bill, and closing out the trust account?
    • Do you have a written policy on file retention, destruction, and storage?
    • Do you use a case-management software program?

    8 Risk Management Categories Critical to Your Practice 

    1. Office management: Work on being organized to maximize your effectiveness.
    2. Case management: A good tickler system and involved employees can help you avoid making scheduling mistakes and procrastinating on cases that need attention.
    3. Calendaring: Use a reliable calendaring system and train everyone in the office to use it to track dates and deadlines.
    4. Client relationships and client communication: Manage your clients’ expectations with regular updates, and document your communications.
    5. Time and billing: Your billing statements should convey the value of your services and what clients are getting for their money in addition to communicating what you did, how long it took, and things for which you are not charging.
    6. Ethics: Follow the Rules of Professional Conduct for Attorneys, read ethics opinions issued by the State Bar Professional Ethics Committee, and, if necessary, contact the State Bar ethics hotline for informal guidance at (800) 444-9404, ext. 6168, Monday – Friday, 9 a.m. – 5 p.m.
    7. Trust accounts: Follow the trust account rules, SCR 20:1.15, and train your staff on the handling and accounting of trust funds.
    8. Take care of yourself: There are several things lawyers can do to alleviate or reduce the anxiety that comes with the job. For help managing stress or addictions, contact the State Bar’s Wisconsin Lawyers Assistance Program 24-hour helpline at (800) 543-2625.

    3) Calendaring

    This category goes hand in hand with the case management category. It is very important to have a reliable system for tracking dates and deadlines. That may sound obvious, but too many lawyers get burned by calendaring errors and end up missing deadlines. Here are questions that may help you avoid being one of those lawyers.

    • Does your system include these features: computerized calendar system, manual system, and attorney calendar with a matching assistant’s calendar?
    • Does someone on your staff always have access to your calendar, especially if you are out of the office?
    • Do you have a backup system for both your electronic files and your employees?
    • Do you calendar warnings before ultimate deadlines?
    • Do you follow up to see that the work was actually completed?
    • Do you routinely enter important dates related to things such as statutes of limitation, court appearances, procedural deadlines, client-imposed deadlines, discovery, billing, transactional matters, and dates you will be out of the office?
    • Who in your office controls your docketing calendar?
    • Is everyone in the office trained to use the office calendaring system?

    4) Client Relationships and Client Communication

    The way you communicate with your clients can make a big difference in the quality of legal service you are providing them. Just as important, it can affect the outcome of a case. Knowing the law and how to apply it are simply not good enough. Communication affects your clients’ expectations and whether they understand the nature of their legal problems. Whether it is oral or written communication, don’t overlook its importance. Here are some questions to ask yourself when dealing with your clients.

    • Do you document in writing all your communications?
    • Do you send new clients a letter of engagement? Does it include the scope and terms of your representation?
    • Do you update your clients regularly on the status and progress of their cases, even if there are few, if any, developments?
    • Do you address your client’s expectations at the beginning of the case? Do you do the same during the case if you sense the client’s expectations are unrealistic or for some other reason cannot be met?
    • Do you return clients’ phone calls promptly?
    • Do you make sure the client is a good fit for you and your practice before agreeing to accept the case?
    • Do you decline cases outside your areas of practice or expertise?
    • Do you continually reevaluate your cases, reviewing their strengths and weaknesses?

    5) Time and Billing

    Your billing statements are a form of communication to your clients. They tell the clients what you have done and how long you spent doing it, of course, but they also should convey the value of your services and what clients are getting for their money. Develop a procedure for communicating your fees and costs to clients and stick to it consistently. Make sure your clients understand and agree to what and how they will be charged before you get deeply involved in their cases. Fee disputes can be ugly and often lead to malpractice claims. Here are some issues to consider.

    • Do you use written fee agreements that spell out exactly what the client can expect?
    • Do you discuss cost expectations with your clients at the beginning of the engagement?
    • Do your bills clearly describe how you are expending your resources and time on a client’s case?
    • When invoicing a client, do you explain everything you did on the case, including things for which you are not charging?
    • Do you keep detailed, accurate time records, including an itemized record of what you have done and how long it took?
    • Do you bill regularly and consistently?
    • Do you proofread each invoice before sending it out?
    • How do you handle delinquent accounts? Do you send payment reminders?
    • Do you ever sue clients for fees? Do you have a policy regarding fee suits?
    • Do you charge hourly rates or use contingency fee billing? Do you ever consider using what is known as “value billing?”

    6) Ethics

    I generally leave ethics to the real experts: people like ethics hotline advisor Tim Pierce at the State Bar and Keith Sellen, director of the Office of Lawyer Regulation. But here are some general questions to ponder when assessing how prepared you are to deal with this part of your practice.

    • Do you have a copy of the Rules of Professional Conduct for Attorneys? In case you never looked, you will find them in the Wisconsin Supreme Court Rules, Chapter 20.
    • Do you ever read the ethics opinions handed down by the State Bar Professional Ethics Committee? You can typically find individual opinions in this magazine when they are issued and a compilation of all the opinions on WisBar, the State Bar’s website.
    • Do you require your staff to sign confidentiality forms acknowledging that they understand the necessity of safeguarding client confidences? Some attorneys have experienced the problems caused by indiscreet employees. Even worse, some staff have stolen client funds. Know your staff, certainly well enough to be able to trust them.
    • Do you know where to call with ethics questions and advice on how to handle ethics problems that might arise? The State Bar ethics hotline is a great place to start: call Tim Pierce at (608) 250-6168 or (800) 444-9404, ext. 6168, Monday – Friday, 9 a.m. – 5 p.m.

    7) Trust Accounts

    This is another area best left to the experts, such as Tim Pierce. However, trust accounts bear mentioning here because of their importance. Trust accounting is often overlooked or given cursory attention by lawyers, but it is something that can get you in trouble if not done properly. Here are questions to consider.

    • Do you know where to find the trust account rules? (SCR 20:1.15)
    • Do you train and educate your staff on the handling and accounting of trust funds?
    • Are your office employees who handle trust accounts well-versed in the rules and do you oversee their work?
    • Do you use written disbursement statements when money is removed from a trust account and are clients given copies of these statements?
    • How often do you reconcile your trust accounts?
    • Do you make sure there are no commingled funds?
    • Do you ensure there is no “borrowing” of funds from trust accounts?
    • Do you periodically have an independent audit conducted on your trust accounts?
    • Do you have a standard procedure for receiving and safeguarding client property?

    8) Taking Care of Yourself

    As a lawyer, your career is filled with ups and downs. How you deal with that pressure can determine your success as well as your ability to stay healthy and happy and help you avoid costly mistakes. There are several things lawyers can do to alleviate or reduce the anxiety that comes with the job. You have to be able to step back and assess what’s going on. Ask yourself the following questions.

    Thomas J. WatsonThomas J. Watson, Marquette 2002, is senior vice president and director of communications at Wisconsin Lawyers Mutual Insurance Co., Madison. Contact him at

    • Do you enjoy your work?
    • Do you like being a lawyer?
    • Do you ever regret becoming a lawyer or wish you did something else?
    • How do you manage your stress?
    • Do you worry about things you cannot control?
    • Do you balance your professional and personal lives?
    • Do you exercise or have hobbies that give you pleasure?
    • Do you take vacations?
    • Do you leave your work at the office or bring it home with you?
    • Are you good at prioritizing your work and staying on task?
    • Do you enjoy being around coworkers, your staff, and other lawyers?
    • Do you fully use your staff to help take some pressure off you?
    • Are you involved in any community organizations that give you pleasure?

    If you need help managing stress or addictions that impede your enjoyment of life or the practice of law, consider contacting the State Bar’s Wisconsin Lawyers Assistance Program 24-hour helpline at (800) 543-2625, or visit


    Practicing law can be very fulfilling and satisfying, but it also contains potential pitfalls. Be aware of those pitfalls and take the necessary steps to avoid them. In the malpractice insurance world, it is understood that even good lawyers make mistakes. You are likely to make an occasional mistake, but the better your practice-management procedures, the less likely you are to commit malpractice.

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