Wednesday, August 26, 2015

On Effective Law Firm Risk Management (Structures, Policies & Approaches)

Our (gracious and understanding) friends at Paragon noted that the intra-firm privilege article we highlighted a few days ago was actually published quite some time earlier. (Your human editor clicked the wrong newsletter link in his haste to bring you the latest and greatest.)

Now we bring you Paragon's latest latest article: "Reflections On a Few Common Elements of Effective Law Firm Risk Management," written by Gilda Russell, previously Holland & Knight LLP's longtime Ethics and Conflicts Counsel. The entire piece is indeed worth reviewing, here are some highlights:
  • "In terms of structure, many large firms delegate risk management responsibilities to a General Counsel’s Office, Legal Department, or some similar type of risk management “team” within the firm... Other large firms choose to follow a model where there are fewer specialized partners on the risk management team... Medium to smaller firms may follow similar models or divide risk management tasks among only a few individual partners, perhaps even a committee, and professional staff."
  • "Each of these approaches can lead to effective risk management, and there may be many reasons why a firm’s risk management program is successful.  This article does not attempt to designate the best approach or discuss all of the reasons for success.  Rather, the analysis below points out a few common elements of effective risk management and, where appropriate, notes how different approaches might fare with regard to these elements."
  • "While effective risk management may have many reasons for success, there are at least a few common elements to any approach that is taken:
    • Firms should make it very clear who the members of the risk management team are and what their respective responsibilities entail and should regularly circulate and update such information;
    • Firms should formally designate one or more members of the risk management team as in-house counsel and clearly indicate the team members acting under the authority of in-house counsel;
    • Risk management team members should communicate regularly among themselves as to matters they are handling;
    • Risk management team members should have a high degree of expertise in the specific subject areas of their responsibility; and
    • Risk management team members should operate in a way that engenders firm support through involving firm management, being available and responsive to firm lawyers, giving firm lawyers the opportunity to be heard and reheard on risk management decisions with which they disagree, assisting firm lawyers in communicating risk management decisions to their clients, and collaborating with other departments of the firm."

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