Disaster Recovery for the Small Law Firm
The Missouri Rules of Professional Conduct (Specifically 4-1.1-Competence and 4-1.3-Diligence) require lawyers to plan for disaster related events to protect their clients’ interests. Some types of disasters are specifically mentioned in the Rules as events lawyers are ethically obligated to plan for (see, M.R.P.C. 4-1.3 COMMENT [5]:
“To prevent neglect of client matters in the event of a practitioner's death or disability, the duty of diligence may require that each practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer's death or disability, and determine whether there is a need for immediate protective action.
When planning for disaster recovery, lawyers should generally not focus on a specific type of event, but rather consider how any type of disaster can negatively impact their practice of law and what must be done to recover.
You Can't Take it With You
Having said that, a warning: Recovery planning for the death or disability of a lawyer will generally require some prior notice to the client and consent from the client for a successor lawyer to become involved in the representation. Specifically, it is recommended the a lawyer’s Engagement Letter or Fee Agreement set out the anticipated involvement of the assisting attorney to close your practice. The authority of assisting attorney should be explained, whether that is only on the level of file review and notification or becoming substantively involved in the representation. The client should be informed that they always have the option of hiring a lawyer other than the assisting attorney.
The law firm’s procedures manual should set out how to access client contact information, as well as all pertinent court information. The procedures should act to prioritize review and client contact based on the timeliness of upcoming deadlines in representations.
Potential conflicts of interests between the primary attorney and assisting attorney will need to be considered and cleared during the initial developments of the plan, and on a regular basis thereafter. The assisting attorney should be familiar with the organization of the law office and files (both active and closed), as well as the firm’s procedure for retaining original client file or documents.
The assisting lawyer will need to have appropriate access the trust account records to be able to timely return unused fees and costs held in trust to affected clients.
If the firm has a P.O. box, the assisting lawyer will need to know its location and how to access it. All access numbers, passwords, keys, safe combinations, etc., should be located together and accessible to the staff and assisting attorney as appropriate.
The contact information of the primary lawyer’s malpractice insurance carrier should be available so the staff or assisting lawyer can make the necessary contacts and reports to trigger any available tail coverage the primary lawyer may have, as well as information for all other insurance products.
Disaster Planning
Disaster planning beyond the death or disability of a lawyer generally proceeds with the goal of quickly resuming the business of the law firm. The plan’s purpose is twofold: 1) protect the firm against revenue and business loss while minimizing potential malpractice liability to clients resulting from disaster related business interruptions, and 2) identifying key systems and anticipate the manner in which the law firm may resume and continue in business should these systems fail or become unavailable.
First, develop contact information and notification trees for all partners, associates, office personnel, clients, courts and adverse lawyers.
Next, prioritize the law firm’s business processes (e.g., document preparation, depositions, research, case preparation, accounts payable and receivable and payroll). After identifying these processes, determine how long a process can be down without an appreciable adverse impact to the practice, the maximum downtime for a process before there is significant impact to your practice, what systems are critical for performing the process, such as hardware, software and personnel, and any key entities necessary to carry out the process such as physical facilities (e.g., the office and communications and utilities), vendors (couriers, court reporters, IT software and/or hardware), supplies (forms, files).
It may be helpful when planning a disaster response to categorize the affect on these processes into two general interruption events: 1) Catastrophic Interruptions (Fire, flood, earthquake, tornado, lawyer death/disability), and 2) System Interruptions (power outages, small fires, illness outbreaks, computer viruses, bomb threats, HVAC problems, employee sabotage, accidents blocking access to building, equipment failure)
See also the Missouri State Emergency Management Agency website:
http://sema.dps.mo.gov/plan_and_prepare/
See Also the Federal Emergency Management Agency website at: http://www.fema.gov/index.shtm and its related sites for additional disaster preparation and response information:
http://www.fema.gov/rebuild/index.shtm
http://www.fema.gov/rebuild/after.shtm
http://www.fema.gov/rebuild/recover/after.shtm
http://www.fema.gov/rebuild/recover/resources.shtm
When developing mitigation strategies, start by determining the most important features of your practice and how to protect them. For example:
Data (client, case files, personnel) is protected through hardware redundancy,
information back-up and offsite storage. Always test computer file backups to ensure that the information can actually be downloaded and retrieved by redundant hardware.
Facilities management will specify where the work of the law firm will be
performed in event office is closed (home office, law library, another firm (client confidentiality issues), copy centers, IT vendor location.
Key personnel will be cross-trained to avoid reliance on a single individual to
perform critical processes where practical.
Communication alternatives should be developed (land-line phone, cell phones,
email and other electronic media).
For each process identified, establish the procedures necessary to continue
the process during the disruption, to recover information developed during the
interruption when process returns to normal and transfer into the normal
workflow, and identify the specific personnel responsible for implementing the process.
The following forms can help develop the above disaster recovery planning. Each department head and/or key management personnel should complete the forms for their specific area of the firm’s operations.
Click Here for a sample form. For more information, contact The Bar Plan's Risk Managers at 1-800-843-2277 x103 or via email at info@thebarplan.com.