Is It Time for your Firm's Ethics Assessment?

By David Majchrzak

Regularly servicing your car and major appliances is commonly viewed as a good way to save yourself some aggravation and potential expensive fixes in the future. This concept, including its potential preventative benefits, can be applied to many other areas, including the ethics of each law firm’s practice. So, expanding on the metaphor, it is a good idea to establish a regular interval to look inside and make sure that the integrity of the machinery is not being compromised. Sometimes, even reviewing just a few aspects of a firm’s operations can indicate areas for improvement. And those facets are not necessarily where you would expect.

When conducting law firm assessments—a fellow professional responsibility lawyer suggested that I cease calling them audits because of the anxiety the word causes—I have found that an easy way to locate potential areas of concern is to first look at what conduct the firm rewards. Even very positive conduct has potential negative repercussions. For example, firms that place a heavy emphasis on billing requirements encourage their lawyers to get better at their craft by maintaining a regular, heavy involvement in the practice. But, such policies can also promote lawyers who struggle to make the minimum padding their bills. Or, on a less obvious front, they could inadvertently yield inefficiency, or worse yet, errors, from lawyers who work too many hours without recharging.

I also like to look at what firms feel are their strengths. Often those are the areas that are unchecked because they have performed well. Plus, over time, as Professor Dorothy Leonard noted, core competencies can evolve into “core rigidities,” sometimes standing in the way of progress. In that way, past successes can impede change and adoption of new modalities that may be more efficient, more profitable, or simply necessary, such as to comply with changes in the Rules of Professional Conduct or the State Bar Act. And, given all indications, the State Bar will be proposing some changes based on the work started by the ATILS Task Force.

Finally, the way that firms take in clients may impact a lot of the risk they bear. Everybody knows to do a conflict check before accepting an engagement. But there are wild differences in what happens next from firm to firm, many of them that are well-aligned with the goal of determining whether the lawyer and client are good fits for one another. Telling signs that a new process should be considered include withdrawals from or substitutions out of multiple cases, significant accounts receivable, and recurrent feelings that the firm has “difficult clients.”

Of course, there are many facets of a firm’s operations that can be examined to improve risk management. But even looking at just a few can often help address some significant, institutional issues.


David Majchrzak is Deputy General Counsel and a Shareholder at Klinedinst PC, and the 2020 SDCBA Treasurer.

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**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**