Jaunita Gobby of compliance consultancy Legal Eye outlines the best way to go about file reviews and why they are more than a regulatory burden on law firms. Legal Eye is a Legal Futures Associate
Rule 5.03(3) of the Solicitors Code of Conduct requires solicitors to have in place “appropriate and effective procedures under which the quality of work undertaken for clients and members of the public is checked with reasonable regularity by suitably experienced and competent persons within the firm”.
File reviews are generally seen by law firms as something they must implement to ensure they comply but the benefits are so often overlooked and file reviews correctly implemented and completed will provide a wealth of information for your firm – including the training needs of your employees.
The process is so simple to implement
(a) define file selection criteria (eg, two files per fee-earner per work type (one active and one completed) and the two oldest active files per department);
(b) define the number and frequency of reviews (eg, once a quarter across the whole firm);
(c) retain a record of the file review on the matter file and centrally (make a copy of the checklist – one is attached to the front cover of the file and the other is stored in a central folder);
(d) ensure any corrective action which is identified in a file review is actioned within 28 days and verified by the reviewer (eg, include a section on the checklist where short-term and long-term corrective action is identified and tick it off when it has been completed and sign it off);
(e) ensure that the designated supervisor reviews and monitors the data generated by file reviews (eg, store the results and copies of the checklists in a central folder – ready for review by the supervisor); and
(f) conduct a review at least annually of the data generated by file reviews (trends are noticed this way – eg, two teams attending to very similar work streams where one is resulting in many corrective action points and the other none, sounds like a training session could easily rectify this).
Finding the right reviewer
A very important part of implementing this process and to ensure it is successful and provides law firms with the benefits, is the selection and appointment of the person who will complete the file reviews. From my experience in reviewing the results of file reviews already completed, the file reviews need to be completed by a senior member of the team or be outsourced.
File reviews completed by fee-earners completing each other’s file reviews or a junior team member/auditor in a compliance department can result in a tick-box exercise with no short-term or long-term corrective action identified or the file reviews being de-prioritised and their case load focused on instead – which is quite understandable really!
It can work if a supervisor is in place supervising the process and checking the results – which in itself will add more workload and is not efficient with regards to time.
Outsourcing your file reviews can add a lot of value regardless of how large your firm is or the number of offices. It adds additional value to law firms with numerous offices, as the firm will have the comfort of knowing that all file reviews are conducted in the same manner, correctly and fairly with all corrective action identified regardless of whose file it is. That is an additional benefit of a neutral auditor.
File reviews can be completed once a quarter with two files from every fee-earner (across each work type) selected as well as the two oldest active files per department. The process is then completed over one day or more if it is a larger firm and/or multiple offices. Corrective action is identified and the files handed back to the partners/fee-earners and any corrective action required is completed, updated on the checklists and copies of the checklists filed as required.
File reviews are a valuable part of a law firm’s compliance toolkit – but you need to ensure they are implemented and completed correctly and effectively.