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17 Prof. Law. 1 (2006)

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An Integrated Law Firm Loss Prevention Matrix
Peter J. Winders

He who flees from the noise of the fear
shall fall into the pit; and he who comes
up out of the midst of the pit shall be
caught in the snare: Isaiah 24:18, pla-
giarized in Jeremiah 48:441
As if a man fled from a lion, and met a bear;
escaped into the house .. and a snake bit him:
- Amos 5:19
A combination of circumstances creates the
serious professional liability claim; and a combi-
nation of measures can protect against it. The guy
in Amos may have been negligent in provoking the
wildlife, but with better pest control, he would
have been okay.
LARGE CLAIMS AGAINST LAWYERS
Almost all very large claims against law firms
in the past 25 years have involved a convergence
of several of a group of specific factors listed in the
table below. The large claim tends to be a perfect
storm situation where not just one thing goes
wrong but several things coincide to make the sit-
uation worse. This observation was true of the sav-
ings and loan scandal cases, the recent corporate
accounting collapses, the dot com cases, and the
aiding and abetting claims - in which the plaintiff
contends that the defendant's transaction lawyer on
various theories became a participant in defen-
dant's schemes. It is rare that a really big claim
involves only one or two of these factors. Some of
these factors allow problems in the door, while
other factors allow problems to grow undetected or
unaddressed until they cannot be contained.
COMPREHENSIVE Loss PREVENTION
The loss prevention structure for a law firm
involves a combination of elements   policies,
programs, systems and aspects of firm culture.
Peter J. Winders is General Counsel, Carlton Fields, Tampa, Florida.

Done right, they are complementary and can pro-
vide layers of protection. The components can be
classified as follows:2
Gatekeeping Systems - These are systems that
can be enforced by strict application of procedures
as part of a process that everyone has to do. An
example is the Business Intake System: to open
and record time to and bill a matter, certain steps
have to be accomplished, and the firm can protect
itself by adding steps with loss prevention value.
Because everyone wants to record time and bill,
this is an occasion to impose other tests before that
can be accomplished. Another example is the
Lateral Hire procedure, which similarly may have
imposed on it certain checks and requirements
providing loss prevention information and requir-
ing loss prevention or risk decisions. If mechani-
cal steps are required before something can be
accomplished, that also provides an opportunity
for application of the additional judgment of a par-
ticular person or group.
A number of things can be guarded against at
the gate by a Business Intake System that requires
signoff by one or more persons of trusted judg-
ment other than the originating lawyer:
Unworthy or undesirable clients.     By
requiring signoff from a person of trusted
judgment other than the originating lawyer,
and by providing client background informa-
tion through appropriate research to aid such
judgment, the unwitting acceptance of a client
with a history of changing lawyers, fraudulent
activities, or other undesirable traits, is dimin-
ished.
Dabbling.    If the business intake review
includes the leader of the department in
whose specialty the matter falls (not the head
of the originating lawyer's primary depart-

Continued on page 4

2006
Volume 17
Issue Number 1

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