It appears that the legal fraternity/practice has one of the highest
error rates amongst the professions. In every case that comes before the courts, one out of two lawyers is wrong, which translates to a 50%
error rate. The truth is, lawyers are actually very poor at dealing with human
error, whether those of their colleagues, subordinates or their own.
It must be recognised that within a firm, operational risk arises as a result of human error or omission. Partners must accept that while human error cannot be eliminated entirely, the number and severity of such errors may be materially reduced if things are well managed. Studies and reports indicate that the firm or corporate culture has a significant role to play in the managing of human error.
Management structures in a firm should give equal weight to both management and professional fee earning skills. The firm must have a structure that recognises human fallibility. It must have a management style that encourages both legal and personal problems to be brought into the open. And the personnel policies in the firm must support these principles. Otherwise, fee earners and staff will bury a problem until it gets so big, it cannot be contained anymore. When that happens, a great deal of damage may already have been done and containment will be difficult.
Partners (or directors) must recognise that their status requires leadership skills and they must recognise the link between leadership and management responsibility. They must recognise and reward management skills as well as fee earning capability, and the same emphasis must be placed on reducing human error in the following areas:
I recently asked an experienced inhouse counsel if she would consider returning to practice, and these were her comments: '[I] have heard horror stories of how partners (especially in big firms) don't teach because they simply have no time and just scream at you to produce the work … '. I am sure many lawyers can identify with this.
Partners should not automatically react to human error either as evidence of incompetence or as an issue for reprimand. They should not expect any member of staff to undertake all of his or her work unsupervised. And they should not take for granted regular input of overtime. Partners must be able to recognise and react appropriately to personal as well as legal problems.
Of course this is easier said than done. It is essentially a matter of developing the right culture in the firm. Unless the attitude of senior management is conducive to the effective management of operational risk, it is extremely unlikely that clients will receive real value. Management must be cognisant of increasing consumer awareness and the intent of corporate clients, both local and international. With the right culture, the firm can also prevent complaints and claims arising out of operational risk exposure.
A firm's claims (or clean) record of the past is no guarantee of what may happen in the future. At this juncture, it is probably useful to remind ourselves that market research shows that a happy customer tells three people of his good experience with a product or service provider, but an unhappy customer tells 10 people of his unhappy experience. And it costs at least three times more to gain a new client than it does to retain an existing one.
Stanley Jeremiah
Goodwins Law Corporation