Technology to the rescue?

While the adoption of new technology can allow practices to streamline processes and cut costs, it may also cut down on the potential for claims. Although larger practices have invested large amounts in IT, the benefits of IT in managing risk may be obtained by firms of all sizes. Many firms are put off utilising the technology more because of:

• Cost
• Unfamiliarity
• Difficulty in adapting existing processes to fit with the technology (or vice versa)

Marsh asked five practitioners to comment briefly on how IT can reduce the potential for claims within practices.

Ewan McIntyre, Partner, Robson McLean but a partner with Morton Fraser from 1 November, has been responsible for IT systems development and testing

Ian Thomson, Partner, Morton Fraser, has been instrumental in developing in-house IT solutions, including electronic filing systems

Alison Grant, Partner, Biggart Baillie, uses technology on a daily basis in litigation and licensing work.

Ian Hunter, Partner, Jas. Campbell & Co, developed and implemented an IT infrastructure for the firm while concurrently achieving Investors in People accreditation

Colin Macleod, Partner, Dundas & Wilson, has wide ranging experience of the use of technology to assist in risk management issues

The contributors were asked to give comments on some general issues relating to IT and risk management systems.

CASE MANAGEMENT

By creating systems that lessen the likelihood of mistakes, there is a possibility of assisting fee-earners/ partners in minimising risk. Although, as with much in technology, larger organisations often provide the resources to drive development of new systems, there is much in the current market that can benefit the majority of firms. Smaller firms with a relatively low level of investment should not be afraid to harness the risk management advantages of their existing technology.

A case management system can be helpful in preventing key dates slipping past unnoticed. A number of our contributors mentioned the potential for efficiency gains as well as risk management – Colin Macleod comments: “The ‘selling point’ would probably be that it was more streamlined and efficient to use IT as opposed to a paper based system”, although he adds that “I do have some concerns about relying solely on one form of system”. Ewan McIntyre agrees that the risk of key dates being missed can be lessened but this proceeds on the assumption that the system is used properly: “Assuming correct data is input, case management should reduce the risk of correspondence not being sent at the correct time or containing incorrect or insufficient information, assuming proper style letters form part of the system”.

Comment

There are numerous examples of claims being generated through inaction on files. All practitioners will have been in the position, at some stage in their careers, of thinking “I really must get that file moving again”. Due to pressure of work, many solicitors can find this becoming a regular thought, or a mantra to be repeated at the start of every working day.

Residential conveyancing transactions are prime examples of matters which have a multiplicity of steps which are regularly repeated in the majority of files. The fact that many practitioners have a significant number of active files of this type can lead to steps being missed simply because of the volume of turnover. Checklists are one way to help overcome the fallibility of individuals’ recollection about the state of the matter. As a development of this approach, case management of some form may further assist the busy practitioner by generating prompts as well as style letters and forms at appropriate stages.

ELECTRONIC DIARIES

In addition to problems resulting from inaction on files, many claims continue to arise from critical dates being missed. From a risk management perspective, standardisation of diary systems can be enormously beneficial. Ewan McIntyre agrees – “a centralised diary allows reminders of key dates to be sent to fee earners and managers. Similar benefits occur where fee earners are absent through illness, holiday or leave the firm” although, as Ewan McIntyre and Colin Macleod point out, the system has to be followed and used consistently, since there is no real difference between electronic and paper diaries if badly organised – they are still badly organised with consequent risks of delays, missed dates, misunderstandings.

One further advantage pointed out by Ewan McIntyre is the ease of checking the diaries of others (coupled, in his firm, with a reporting mechanism). Ian Thomson also mentions the double checking mechanism: “Our diaries are created automatically by the system and if reminders are not dealt with they ‘escalate’ to partners. Only deliberate deletion of the reminders would allow an action on a file to be forgotten about.”

Alison Grant highlights the practical difficulties that can be experienced in transferring control of diaries to electronic systems: “I have had a tendency to use a back-up manual diary. I seem to have a fear that technology will crash leaving me without any back-up. Also, I think it would be easier to consult a manual diary when looking back to find out when certain events happened, such as Proofs, Appointments, etc. My secretary is trying to persuade me that all appointments should be put on the computerised diary and that only Court dates and appearances should be put into my manual diary. I am still finding this difficult to take on board! No doubt others have a similar problem.” Despite that, Grant’s firm has harnessed the risk management benefits of certain electronic diary systems. She has recently been involved in setting up a system for Caveat reminders: “this is very useful as the lists for both Sheriff Court and Court of Session Caveats can be viewed by both our Edinburgh and Glasgow offices and updated on a continual basis.”

According to Ian Hunter, one of the risk management benefits is that “the diary system within our IT network is available to everybody and to each member of the team concerned. The information is shared and all dates, transactions, court appearances are available and a hard copy of the central office diary is produced for everyone.”

Colin Macleod comments that “The major benefit I think is probably in standardisation and information sharing i.e. I can access all of the diaries of those who work for me (indeed all of those who have granted to me access permissions)”.

Comment

The need for diary systems to be accurate and useful and operated consistently goes without saying. Missed critical dates continue to be a major source of claims. Many of these claims would have been avoided by the use of robust diary systems. Whilst IT is not the only solution to this risk, it can potentially help as an element of a ‘belt and braces’ approach to avoiding time bars. The important issue is that a system should be adopted across the firm as a whole and stuck to without fail. The implementation of an IT system may assist in achieving and maintaining this standardisation of approach to managing critical dates.

DOCUMENT DRAFTING

Without the benefit of a comprehensive library of styles and precedents, much of our work would be a lot more complex. Even the humble word-processor has brought significant risk control benefits through the management of centralised styles that can be easily ‘cut and pasted’ to new transactions (although many of us will have had experience of ‘technical glitches’ which have caused words or lines mysteriously to disappear from word processed documents).

“Firm-approved style letters can help to enable partner level control. It makes life easier for the solicitor if reduced effort is taken to draft complex documents” comments Ewan McIntyre. Many practitioners also see the centralisation of precedents as a key risk control aided by IT. Ian Thomson advises that “the system can dictate what style documents are available to a fee-earner as well as track new versions of documents. The real benefit is that it should make it a good deal less likely that a fee-earner uses an out of date or erroneous style document as a starting point for drafting”. Ian Hunter confirms that the system now in place “means that individual styles which have been approved should be used by everyone and if a change is approved every new version of that document will incorporate that change immediately.”

Comment
Claims have resulted from the use of outdated/unapproved styles of document that have been photocopied and re-used without reference to any updates. Additionally, claims can occur as a result of incorrect versions of documentation being used. These issues are often regarded as ‘secretarial’ matters – however, in a profession where accuracy is essential, the consequences of even fairly minor slips can have serious consequences. IT can bring benefits through styles which are permanently in a state of currency and accessible through an approved central record. In addition to risk management benefits, the practice can also achieve efficiency benefits through avoiding duplication of effort.

The second and concluding part of this article will feature in the November issue.

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. Nothing contained in this article should be taken as expressing a view on the appropriateness of a particular IT system or product. Alistair Sim is Associate Director in the Professional Liabilities Division at Marsh UK Limited. Charles Sandison is a Consultant with the Business Risk Consulting Division of Marsh UK Limited. He specialises in risk issues resulting from new technology which includes advising solicitors on issues of information security.