Is it Time for Your Law Firm’s Wellness Exam?
Managing your clients and firm is more than a full time job, and things seem to get more hectic every month as your business grows. While you’re busy running the business, others are making decisions regarding processes, people and systems. Even what may be considered a trivial operational decision could lead to errors that cost time, money, reputation and even your livelihood.
Given that many insurance policies renew at the end of the year, it’s time to think about a Practice Management Review (or audit) – like an annual physical exam for your law firm.
The importance of an annual law firm business practices review.
Even though everything “feels” good, there may be underlying symptoms that things are a bit off track. Something may have happened that, unless detected and corrected, will explode into a liability or disciplinary situation. Here are a few examples of things that seemed trivial on the surface, but ended up causing some major problems:
- Commingling funds, and other accounting shortcuts.
- Change in the firm not reflected in business practices or E&O policy.
- Incorrect storage, calendaring and practice management tools or processes.
- Client relationships and communications not adequately managed and documented.
- No confidential employee feedback mechanism in place.
- Backup systems missing, broken or inadequate.
Good Employees Make Mistakes
As your “weakest link,” your employees may not know that a mistake has been made, or may be afraid to tell you. As your firm evolves, your processes and systems also require proper maintenance and updates, including ongoing employee training. Small deviations can cause big problems over time, and a periodic review can help you avoid death by a thousand cuts.
A Practice Management Review will uncover ways that your firm can operate more efficiently. You’ll catch problems before incidents or claims occur, or know you have a situation that requires reporting. Some insurance carriers offer a premium discount for this type of audit, so ask your current carrier or use the audit to obtain new or better coverage from another carrier.
The Best Time to Audit Your Practice – Today
There are several ways to accomplish this review. You can do it yourself, although be sure to document your self-audit procedures ahead of time. The GA Bar also offers two levels of consultations under the Law Practice Management Program, or you can hire a neutral third party to conduct a detailed review of your business systems, policies, and procedures. Here are the best times to do this:
- Several months before insurance renewal – Show a clean bill of health.
- Change in firm management or structure – Start with a clean slate.
- When there’s a problem – Show that this is an isolated situation that you’ve addressed.
- Coincide with your annual physical – Let your doctor remind you.
Proactive law practice management is the best policy to detect and deter potential problems. An ounce of prevention truly is worth a pound of cure when it comes to your personal health and the health of your law firm. Stay Healthy.