EFFECTIVE FILE MANAGEMENT POLICIES

Category: 
Management

by Graeme McFadyen, CEO, Trilby Misso Lawyers

Improving leverage, that is the ratio of fee earners to principals, probably represents the best opportunity for most firms to improve profitability after chargeable hours.
To a large extent the capacity to improve leverage effectively is dependent on the delegation skills of the principals. In most firms delegation tends to be ad hoc and of a variable standard. In an environment where delegation practices are poor not only does profitability suffer but so too does the morale of the professional staff. Good delegation practices have a huge impact on the rate of skills development by staff, their level of job satisfaction and ultimately their retention.

With this last point particularly in mind at a previous firm I enlisted the enthusiastic assistance of a pair of experienced associates to draft a delegation policy designed to enable the firm to deliver cost-effective and timely legal services to the firm’s clients by optimizing an efficient team approach using partners and employed solicitors. The policy encourages the professional development of staff through the efficient use of their skills and experience by encouraging staff to act with an appropriate level of autonomy in the conduct of their work while under the general supervision of a partner.

These policies impose obligations on both the partners and work authors to work together to optimise efficiency, productivity and ultimately the profitability of the firm.

Summary of obligations of partners

In accordance with the detailed policies set out below, the partners will:

  • delegate as much work as practicable to work authors at the earliest opportunity;
  • provide sufficient instructions to work authors to enable them to complete the delegated work efficiently and as required by the client;
  • make themselves accessible to work authors in order to review and monitor the delegated work in a timely way;
  • comply with the open door and open line policies (explained below); and
  • encourage and assist work authors to be responsible for the conduct of delegated work, including client contact, mail signing and billing procedures, as appropriate.

Summary of obligations of work authors

In accordance with the detailed policies set out below, the work authors will:

  • ensure that they understand a partner’s instructions so as to enable them to complete the delegated work efficiently and as required by the client, and make arrangements to discuss issues with the partner as required;
  • apply themselves to their work diligently, and take responsibility for the conduct of the delegated work, including client contact, mail signing and billing procedures, as
    appropriate;
  • ensure that in their contact with clients, work authors will conduct themselves in a courteous and professional manner;
  • comply with the firm’s open door and open line policies; and
  • comply with the firm’s policy of performing six chargeable hours of work each working day.

File allocation

When instructions are received in relation to a new matter, the relevant partner will review the instructions and make a decision about how the work on the file should be carried out. The partner will consider the following principles in making this decision:

  • Partners should delegate as much work as possible, and retain only those files which have a level of complexity or sensitivity requiring their personal expertise.
  • Files (or if appropriate, specific tasks within a file) should be delegated at the earliest possible opportunity.
  • Files (or if appropriate, specific tasks within a file) should be delegated to the same work author as far as possible.
  • It is preferable that the work author who will perform the work has contact with the client as soon as practicable, and be involved as far as possible in the receipt of instructions throughout the conduct of the matter.
  • Partners will consider the relevant work authors’ level of experience, workload and training needs.

Instructions to work authors

When a partner (or other professional staff member) delegates work to another work author the following principles shall apply:
The partner should at the earliest opportunity give clear, concise and comprehensive instructions, including:

  • all necessary factual or legal background;
  • all relevant issues;
  • any reasonable suggestions which might facilitate the work being completed efficiently, including any initial thoughts on tactics or strategies;
  • the results or outcome required of the work (eg an opinion, document, report);
  • any relevant dates, time limits or milestones; and
  • whether a quotation or estimate of fees for the work has been given.
  • The partner will make clear the degree of urgency of the work and the time required for completion of the tasks, at the time work is delegated.
  • The partner should make clear how much time can justifiably be spent on carrying out the client’s instructions, by reference to the ultimate cost to the client or any other relevant factor. If a fee has been quoted or an estimate of fees for completion of a file (or a specific task within a file), then the work author should be advised that the quote has been given at the time of allocation of the work.
  • The work author should perform the work with this in mind. If it becomes clear that the work cannot be completed within these parameters, then this should be raised with the partner at the earliest possible opportunity.
  • The partner delegating the work will make himself or herself reasonably available to discuss any issues relating to the work; and to review the work progressively, in line with the principles relating to partner accessibility as stated below.
  • If the work author has any doubt at any time about any aspect of the instructions which is hindering the efficient completion of the work, the work author should raise the issue with the partner as soon as possible, in accordance with the principles of partner accessibility.

Principles of Partner Accessibility

  • The partners will make themselves reasonably available to deal promptly with requests from work authors to discuss any issues relating to the work and to review the work.
  • The request by a work author for a partner to review work should indicate the degree of urgency required. The request may be made directly or by email.
  • If the work is of an urgent nature, then the partner should make arrangements to review the work urgently.
  • If the partner is not immediately available, then the work author may make a diarised appointment for the review to take place, through the partner’s secretary, if need be.

Open door policy

As far as practicable the firm adopts an Open door policy. This means that all partners and staff will leave their doors open at all times, except in exceptional circumstances. The purpose of this policy is to ensure as far as practicable that all partners and staff are readily accessible and contribute to the office esprit de corps.

Open line policy

As far as practicable the firm adopts an Open line policy. This means that all partners and staff will answer their telephones personally rather than rely on their secretary to filter all calls. One of the consistent complaints by clients is their inability to speak directly with the partner or solicitor handling their matter. This policy resolves that problem. Of course some practitioners will regard this latter point as heresy on the basis their time is too important to be rudely interrupted by clients seeking uncontrolled access. There obviously needs to be some balance and if necessary to complete a complex advice the phones can be diverted but these should be the exception rather than the rule.

Conduct of work on files

  • The partners encourage work authors to take responsibility for the conduct of files (or specific delegated tasks in the file as the case may be).
  • The partners will ensure as far as practicable that files (or if appropriate, specific tasks within a file) will be delegated to the same work author, in accordance with the principles of file allocation.
  • The work author is responsible for the day-to-day conduct of the file (or specific delegated tasks in the file as the case may be). This includes the following:
  • contact with the client (subject to the principles of client contact set out below);
  • contact with other parties (for example, the other parties in litigation, counsel, experts);
  • receiving instructions throughout the conduct of the matter;
  • receiving all correspondence throughout the conduct of the matter (subject to the principles regarding mail set out below);
  • preparing and sending correspondence (subject to the principles regarding mail set out below);
  • billing the file (subject to the principles of billing set out below);
  • keeping the partner appraised of all material developments in the file and as agreed milestones are achieved; and
  • obtaining direction whenever there is any doubt.
  • The day-to-day conduct of the file does not include:
  • giving undertakings on behalf of the client or the firm;
  • making offers of settlement or providing advice of a substantial nature; or any tactical or other decisions which require the input of the partner or which might expose the firm to a professional negligence claim.

General principles of client contact

  • The work author should be listed in all correspondence as the contact, other than in exceptional circumstances.
  • The partners should encourage all work authors to make all client contact wherever appropriate.
  • At all times in their contact with clients, work authors will ensure that they conduct themselves in a courteous and totally professional manner.

Mail

  • All incoming faxes and mail are to be seen by the partner prior to distribution to staff. As far as practicable the mail should be distributed to the relevant work author on the date of receipt.
  • Once a file (or specific tasks within a file) has been delegated, all mail relevant to that file (or that task) will be distributed to the relevant work author. If the partner has any comments or instructions to the work author about the mail, the partner will communicate those instructions to the work author, in accordance with the principles of instructions to work authors.
  • When the relevant partner is absent (for example on leave), specific arrangements will be made by the partner about the distribution of mail and the signing of correspondence.
  • If a work author has prepared draft correspondence for review by a partner, the partner should sign or at least settle this mail within 48 hours, other than in exceptional circumstances.
  • If a partner requires any amendment of a material nature to draft correspondence prepared by the work author for the partner’s review, the partner will ensure that the work author has the opportunity to review the amendment before the correspondence is sent.

The following rules apply specifically to signing mail (the reference to mail extends to
emails):

  • All significant mail will be signed by partners - significant mail includes:
  • advice to clients;
  • any further correspondence to clients which contain anything by way of an advice;
  • correspondence between parties which may be contentious;
  • pleadings; and
  • correspondence between parties which express an opinion or an interpretation of law.
  • All other mail such as general letters to clients enclosing documents and seeking cheques etc are not regarded as significant correspondence, and may be signed by work authors with signing responsibilities.
  • As soon as practicable after signing, copies of all correspondence or emails signed by solicitors will be provided to the partner either in hard copy or electronically.
  • Articled clerks must not sign any mail.
  • As much as possible but in accordance with client preference external correspondence should be conducted by email. However all “significant” mail is to be confirmed in writing.

Billing

  • Files should be billed at the earliest possible opportunity, for example, immediately upon completion of certain appropriate stages or events, or immediately upon the completion of a matter. In the case of on-going files, work authors will consider monthly all their current files under their supervision to identify which files should be billed.
  • All files should be billed in an amount not less than the present amount of work in progress, unless there are sound reasons not to do so. Work authors should consider whether there are sound reasons not to bill the file for the present amount of work in progress, or whether a premium should be added.
  • Work authors are to confer with the relevant partner and decide in conjunction with the partner which files should be billed, and for how much.
  • Bills will be sent out as soon as possible after having been raised.

The biggest impediment to effective delegation is the attitude of the partners. Mark Vincent, principal of Insight Plus, Business Development Strategists, ran a workshop for a law firm in 2003 in which all partners were requested to identify their principal objections to delegation. Those objections are noted in the accompanying table. Reasonable actions which can be adopted to overcome most objections are noted but of course the principals must want to do it.

Objection Actions which can overcome objection
Client only wants to deal with a partner Explain cost benefit of dealing with other people
Confirm close supervision so partner still “on the job”
Arrange joint client meetings with solicitor handling file
Ego – belief that noone else is as good Improve internal training
Introduce effective delegation as one of partner performance criteria
Reward team rather than own performance
Fear of poor quality work Improve internal training
Improve staff employment process
Improve file management procedures to ensure quality instructions
Loss of control of file Introduce regular formal file reviews
Arrange joint client meetings with solicitor handling file
Implement effective bring-up systems
Personal relationship with client is diluted Arrange joint client meetings with solicitor handling file

Fear of becoming redundant Learn new skills
Impediment to meeting fee budget Introduce effective delegation as one of partner performance criteria
Reward team rather than own performance
Takes longer to explain than to do task myself ATTITUDE – delegation must be embraced as a firm file management strategy

As you can see the objections identified above have more to do with loss of control than with concerns about the ability of the lawyer handling the matter.

One area where a managing partner could make a significant contribution to improving the financial performance of the firm is encouraging the broad adoption of positive delegation policies.

Nick Stretch, managing partner of Gadens Melbourne, observed “I think a lot of firms end up a bit like a fruit and vegetable or fish market. They’re individual stalls who are competing with each other within the market. Obviously it works a lot better if you all cooperate. It’s funny when you actually do the team thing, really do it, really send the work where it should go, then all of a sudden you start driving reciprocity around the firm. You create a culture of sharing and the result is a massive lift in financial performance”.