Risk themes from the conference

The author attended three of the sessions at the Society’s Annual Conference in Inverness on 8 April.  The discussions prompted by the presentations disclosed a keen interest on the part of practitioners in the business and practice issues those sessions raised.  But how do the issues impact on considerations of risk and risk management for solicitors?

‘The Challenges and Opportunities of the Technological Age’

In this highly entertaining talk, Gerry Sinclair encouraged solicitors to at least consider the use of the Internet for the provision of legal services.  As well as stressing the opportunity it presents for the profession, Gerry made the point that the Internet simultaneously creates opportunities for non-lawyers to offer legal services and thereby operates as a threat to the profession.

There is no doubt that the Internet is seen as presenting opportunities for solicitors as it does for so many types of business.  There is a rapidly growing list of law firms with websites which are being used to market the firm’s services.  There is evidence too of increasing use of e-mail for communication with clients and of opportunities being taken to provide certain services over the Internet.

While very enthusiastic about the opportunities the technology presents, Gerry did acknowledge the challenges and the risks.  He catalogued the issues that need to be addressed particularly when setting up any kind of interactive website - confidentiality, data protection, defamation, copyright - the checklist goes on and on and it is intended that an article on this subject will feature in a future issue.

In the meantime, keep in mind the following points:

• Establish a system to ensure that the information on the website is correct and up to date - this will mean having diary notes at regular intervals to ensure that the content is regularly checked and approved;
• Establish a procedure for checking and signing off any changes that are made to information on the website - use a checklist to ensure that all relevant issues have been addressed on each occasion;
• Consider issues of confidentiality, infringement of copyright, data protection, Law Society approval - have these issues on a checklist and keep adding to the checklist;
• Use appropriate disclaimers;
• If proposing to provide legal services over the internet, check with the Law Society of Scotland that the Society is content with what is proposed;
• Check that your professional indemnity and other insurances provide adequate protection;
• Think about the business interruption impact of any technical problem with the web-site - what contingency plan and what insurance do you have?

If acting in the purchase or sale of a business, check whether the business operates a website.  If it does, it may be appropriate for the contract to take account of this as a potential risk by way of warranties and indemnities.

Managing the media

The speakers addressed from the perspective of journalists, a practising solicitor and the Society’s press officer how solicitors should manage communications with the press.  In practice, solicitors might be approached for information on a wide range of transactions and disputes involving clients.

The members of the panel spoke of the challenges in dealing with enquiries from the press as well as identifying that there may be opportunities for your clients.  One of the panel, a solicitor, spoke of situations in which clients had benefited from taking the initiative with the press and by seeking specialist advice had been able to have the facts presented in a particular way by the media.

The speakers did not belittle the challenges and the risks and the overriding consideration which is client confidentiality.  The position is made clear by Article 4 of the Code of Conduct and the Society’s Guidelines on Confidentiality which state: “Confidentiality is a privilege which is exercisable by the client and which can therefore be waived by the client.”

The safest approach must be to proceed on the basis that you cannot speak about any client or about any client’s affairs except with the express approval of the client.  In practical terms, that probably means that the text of any statement to be issued and the terms of information to be provided to the press should be signed off by the client in advance.

Risk Management points:

• All staff should be made aware of the importance of client confidentiality;
• Staff need to appreciate that the duty of confidentiality applies not only during their time in the office but the duty also requires them to refrain from talking about clients and their business away from the office;
• Consideration needs to be given to procuring confidentiality undertakings from all staff;
• Ensure that all staff, including telephonists/receptionists understand how they are to deal with any call from the press;
• The position of temporary staff needs to be considered - should temps be required to sign confidentiality undertakings?
• Should they be kept away from high profile, sensitive client matters?
• Consider having an agreed policy governing communications with the press.  Should all press enquiries be referred to a designated partner?
• In appropriate cases, consider with your client the need to seek specialist media relations advice.

The foregoing comments of course apply not just to communications with the press but equally to all the media.

“Fresh, New Airs” - Lawyers Managing Change

This was a thought provoking presentation by Malcolm Mackay on the business challenges facing the profession and how the profession might respond to those challenges.

Provocatively perhaps Malcolm talked of a time not far off when black letter law will be readily available to more or less all of us on-line.  How will that affect the role of the solicitor?  The speaker talked of the need to re-define what and how legal business is done and included in that the use of the Internet.

To someone who encourages the profession to adopt a risk conscious approach in all matters, it was striking when Malcolm encouraged the audience to adopt an entrepreneurial approach and to be prepared to take risks.  Is that message inconsistent with the message that features each month in this page?  Does risk management stifle innovation?  Not necessarily.

This page has previously considered issues such as the use of e-mail, direct access to the Registers, foreign work/foreign advice, seconding of specialist personnel.  Each of these issues involved, in its own way, at some point in time an element of novelty, a departure from the ‘traditional’ approach.  As such the novel aspects have introduced new risks for practitioners but risks which can be effectively assessed and managed.  See the article by the author ‘Diversification and Specialisation v Management of Professional Risks’ in JLS August 1999 p37.

Experience shows that solicitors have been alert to the risks involved in new areas of practice and new ways of operating and alert to the need to manage those risks through operating systems and procedures, through appropriate contractual arrangements and through insurance solutions.

There seems to be no reason why the profession cannot rise to Malcolm Mackay’s challenge while at the same time continuing to minimise the risks to their practices, including the risk of claims.

Alistair Sim is Associate Director in the Professional Liabilities Division at Marsh UK Limited.

The information in this page is (a) intended to provide guidance on matters of practical risk management and not on issues of law and (b) is necessarily of a generalised nature.  It is not specific to any practice or to any individual and should not be relied on as stating the correct legal position.