More Ideas For A 'Fail-Safe' Office

We are still talking about “tips” that create “fail-safe” administration systems for your office. We have already talked about four of these “fail-safe tips,” they are as follows:
1. Phone message systems;
2. Prospective New Matter Reports;
3. Non-engagement letters; and
4. New Matter Reports.

Before we leave the topic of New Matter Reports, I promised that we would talk about additional “fail-safe tips” regarding these New Matter Reports and in particular, four aspects of these New Matter Reports that are absolutely mandatory if you are going to properly utilize a “fail-safe” component in taking on new business. We are going to discuss each one of these four components in more detail and the four components are as follows:
1. Fee arrangement;
2. Conflict of interest;
3. Responsible person for generating the legal business; and
4. Statute of limitations or other due dates.
Let’s take each of these above areas one at a time:

1. FEE ARRANGEMENT: It is absolutely mandatory that you have a discussion with every client on every matter about what the expected fee arrangement is to be with that particular client on that matter. As you know from previous “tips” my very, very, very (that’s three very’s) strong advice is to have every single fee arrangement with every client on every matter in writing. Fees are the lifeblood of every law firm immediately following having a client. One time somebody asked me what area of law I specialized in, and my comment back to them was, “I specialize in fee-paying clients.” The utilization of some form that makes it absolutely mandatory that a fee arrangement be put down on the form and that some other person besides yourself agrees with you as to the amount and the reasonableness of the fee to be charged for that particular matter. Until each of these matters is signed off by two people in our office, no file can be opened, there is no place to put any time, and there is no place to put any documents that the client is giving you. It is quite interesting to see the efforts that people go to sometimes in order to get a file opened just so they will have an appropriate place to put something. I think that is proof that the “fail-safe” system with regard to New Matter Reports works.

2. CONFLICT OF INTEREST: Checking conflicts of interest is not simply a knee jerk reaction, or simply asking yourself the question, “have I ever heard of the other side in this matter before?” You must have some type of organized conflict of interest system. We previously talked about such a system when we discussed new matter index cards. It is absolutely mandatory that some type of a system be kept regarding conflicts of interest. It is also necessary that such a conflict of interest system be properly maintained and such a conflict of interest system be checked before any new matter is opened in any law firm for any new client. Again, having two people sign off on the fact that the conflicts of interest have been cleared is an exceptionally good policy. Both of those individuals do not need to be lawyers, a trained paralegal or legal secretary certainly knows the ins and outs of the practicalities of conflicts of interest.

3. RESPONSIBLE PERSON FOR GENERATING THE LEGAL BUSINESS: One of the reasons I believe it is so important to have two people sign off on who is the person who brought the legal business into the law firm is to ensure that “business getters” receive credit for their work. I once heard those lawyers described as “FINDERS, MINDERS, AND GRINDERS.” After some analysis of this quote and having lived and worked in several different law firms with many different lawyer of many different personalities, I changed the description to the following: “HUNTERS, SKINNERS, COOKERS AND EATERS.” I think you will find both of these quotes very illustrative. Remember, you can’t manage it if you can’t measure it. If you don’t have some type of a system for identifying, recognizing and rewarding people for bringing new legal business into your firm, you are making a major marketing mistake. We are going to talk in a lot more detail about this when we get back to the area of billing and collecting

4. STATUTE OF LIMITATIONS OR OTHER DUE DATES: Having a system that makes it mandatory to try to determine exactly what due dates and statute of limitations dates apply to a particular matter at the very inception when it is open in the law office is absolutely positively mandatory. I practice in a city that has a street down the middle called “State Line.” There are different statutes of limitations and due dates in each state regarding when various things need to be filed. I was in a law firm one time when one of my partners failed to recognize that a particular matter was a Kansas matter as opposed to a Missouri matter, and through a series of errors allowed a two year statute of limitations to run on a case. How that matter ever got opened in the office without two competent people signing off on the fact that it was a shorter than normal statute of limitations is still a mystery to me. I went back and checked the New Matter Report, and sure enough, two lawyers had signed off on it, but apparently both of them were asleep at the switch and did not realize that even though the client lived in Missouri, the accident happened in Kansas. That was a $10,000 mistake. $10,000 was our malpractice insurance deductible. You will remember the discussion about tickler cards, which in our office we call “blue cards” and how those cards can be used in a “one-right system” for every reminder and due date that applies to a particular matter. There is absolutely no excuse for deciding on what the important dates are at a time the matter is originally opened in your office. As each and every date develops in the file, tickler cards need to be done as well, but the original statute of limitations dates and other important dates in the file need to be done at the very time that the file is being opened.

I think you can see from all the above that the four areas where extra special care needs to be taken in opening a file in your office are indeed the real “fail-safe” questions with regard to taking on a new piece of legal business. If all of these steps is followed and treated as a “fail-safe” concept, when the file is opened you can rely upon the fact that it was done, it was done properly, and it was done timely!

Next week we are going to talk about the necessity of having a new file for each client’s matter. You are probably thinking that simply creates more paper, but believe me, after you hear what I have to say about the subject, I think you will agree about the necessity of having a new file for each matter you open up in your office. Anyone who thinks that I use too much paper should know that I “plant extra trees on Arbor Day” in order to not feel overly guilty about the utilization of so much paper. We will again utilize the “fail-safe” analysis in looking at the necessity for having a new file for each client’s matter so I think you will enjoy what I have to say.

Talk to you next week!

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.