If your decision to terminate the relationship relates to the non-payment of fees, think twice before suing the client for fees. Many professional liability claims result from counterclaims in response to a lawyer's action to recover fees. The lawyer is faced with an account receivable and with the additional headaches of having to spend time defending a claim, having to pay an insurance deductible, and losing precious time that could otherwise be spent on the practice.

LPIC's challenge is to help lawyers practise law more effectively. One way you can protect yourself against the risk associated with law practice is to fully understand your policy and the insurance coverage you have in place. In fact, the requirement that you must be insured is in itself an aspect of risk management, in that insurance protects you and your client from the financial consequences of a mistake.

If you receive a notice of claim, you must report the claim in a timely fashion. Claims reporting and handling procedures are summarized for you in Appendix 8.

Insurance is, however, only the first step. Equally, if not more important, is the need for you to take an active role in managing the risk associated with law practice - through risk management.

As a profession, we're not as advanced as many other businesses when it comes to managing risk. Business and industry have long used risk management as a strategic tool to avoid or minimize various kinds of losses and costs. Law Societies in other jurisdictions such as Australia and some states in the United States, which have adopted risk management initiatives, conclude that behaviour patterns that result in claims can be changed if lawyers are aware of the causes of claims and of the mechanisms to protect themselves against claims.

 

benefits of risk management

Experience elsewhere also reveals that risk management is a win-win proposition for all parties: It improves the practice climate which, in turn, benefits lawyers and clients alike. Lawyers report their practices are more profitable and enjoyable, and they find they can better manage their time and improve the level of service they provide to clients. Risk management also pays off on a larger scale ­ through enhanced credibility for the profession. Clearly risk management must be an integral part of your law practice.