An important step in ensuring proper risk management is to establish a clear
file management process. The term 'file organisation' refers to the way a
physical client-matter file is kept; for example, a well-organised file will
enable someone unfamiliar with the matter to quickly and confidently determine
the current status of the matter at any time during its progress.
In order to achieve this, firms should have policies and procedures relating to the organisation of files. There should be specific instructions on the maintenance of files, such that the type of matter, the content and the progress of the file can be readily ascertained by anyone who needs to refer to it. There should also be specific requirements on the making and filing of clear, complete and legible notes of attendance at meetings, discussions, telephone calls and advice given. Copies of every document prepared should be retained, showing details of the date, execution, witnessing and stamping of the document as appropriate. Successive draft documents should be dated and numbered. Files should contain case plans with instructions from the client, the steps identified as necessary to achieve the desired outcome and the anticipated time line for this to be achieved.
Where the responsibility for the file is passed from one fee earner to another, such movement must be properly documented. Similarly, the movement of the file out of its storage area must be recorded on a file movement card.
The firm must also have procedures to report on the completion of the file, the return of outstanding monies to the client and any return of original documents not retained for safekeeping, including signed acknowledgements from the client. This will ensure that all undertakings have been discharged and that all billings have been completed.
Any one new to the firm must be introduced to the firm's policies and procedures relating to file organisation as part of their induction. Where procedures are not followed, these must be immediately brought to the attention of the person responsible.
File reviews should be carried out regularly by supervisors to ensure that files are well organised. In addition, for risk management purposes, random file reviews should be carried out by an independent person to provide management with the added assurance that work is being done in such a way as to ensure that it is error free, so far as is practicable. Random file reviews should also include files that are entirely handled by partners. Firms should have in place a system to randomly review the files of the managing partner or anyone authorised by him. The reviewers should review the legal advice rendered and the range and depth of work carried out by the fee earner handling the file. They should confirm that the work is in accordance with both the instructions from the client and the terms of engagement and that there are clear attendance notes.
Any matters highlighted in a file review should be addressed and not overlooked. They should be brought up and discussed at management meetings and appropriate action should be taken on a timely basis to ensure that weaknesses are addressed.
Stanley Jeremiah
Goodwins Law Corporation