Case reporting is a necessity to avoid professional liability

By Thomas Berman, Principal, Berman & Associates

Small and medium-sized law firms (and sometimes those much larger than that) often have little transparency in the way that lawyers manage their casework. In smaller firms, there is always the impression among partners that they are aware of the cases managed by others. That is unfortunately often not the case.

In a recent example, a law firm suffered several millions of dollars in claims and was required to return hundreds of thousands of dollars in fees to clients after the facts relating to a partner’s misfeasance and omissions were discovered. In this case, according to the partners involved, there were no warnings of a problem (of course, the staff told a much different story).

This was a firm of just 23 attorneys, with only five partners. The firm billed its time on a monthly basis and, each month, the lawyers were obliged to return their ‘time’ either electronically or by paper forms, which were then input by staff.

The partner in question was notorious among staff for his refusal or inability to get his time into the system. The actual requirement was that time be made available for input on a weekly basis, but that was never the case with his contribution.

The staff (billing clerk, office manager and his secretary) all tried to assist him in comporting with the rules, but he resisted their efforts. The upshot was that his time records were always late and never available until even after the appropriate cut-off date.

This firm had no real case reporting requirements and the only time that cases were discussed was at lunch, where the partners met almost every day, thus giving the erroneous impression that they knew what was happening in the cases. Actually, whatever information was discussed was purely at an attorney’s volition. There were no systematic updates required on each case. The handling of the case was left up to the individual.

To make matters worse, many of the cases in which this individual was lead attorney had no other attorney assigned, so that there was no wingman involved to keep issues from becoming a problem and no staff who could assist in keeping matters under control.

The reality of this partner’s case management was 180 degrees from how he portrayed it. In fact, the lawyer was an undiagnosed diabetic and was an alcoholic. He was having trouble working on his cases and, when the senior partner received a call from his oldest client telling him that the partner had missed a hearing, that was the first that he knew of a problem. From that point on, things unravelled quickly.

In fact, the partner in question had, as it turned out, fabricated his billings for at least three months. There had been virtually no work done on any of his files. Sadly, he was ‘frozen’ in his office, unable to do much of anything.

The jury is out on what kinds of claims/losses may be involved in that situation. The point is that case reports are a necessity in all law firms, no matter what size they may be. Regular reports should be a requirement. Further, no case should ever be assigned to an individual lawyer without another lawyer and/or staff person having the same information available to them contemporaneously.

Suggested requirements

Every open file in a law firm should have a case report and no more than 60 days should pass before it is updated. A litigation matter report should include the following:'¨

• opening case date;

• assigned attorney;

• name of opposing counsel;

• court/jurisdiction;

• date last reviewed;

• summary or conclusion of that review;

• current assessment (if different);

• original assessment (including reserve);

• original budget estimate;

• expenses to date;

• current posture;

• time expended to date;

• estimate of time to conclusion; and

• special issues or difficulties with the file.

 

As a rule, every firm should ensure that every file is reviewed on a regular basis. This isn’t a matter of trust among partners, it’s a realistic understanding that not everyone is able to manage their cases in the way they should be managed all of the time. The firm should provide this support as an understanding of the reality of the practice. '¨

tberman@bermanassociates.net