The risk realities of large and small firm practice.

By Caroline Nevin

Later this fall, I will be speaking at an international conference of law association CEOs. My co-panelists will be the CEOs of the Law Society of England & Wales and the Law Institute of Victoria (Australia). The topic is essentially “Are there two different legal professions: large law firms and everyone else?” Our moderator, seeking to inject a bit of controversy, has asked us to argue for or against the development of different rules and ethical standards for large law firms and solo/small firm practitioners.

It is an interesting issue. On its face, the answer seems simple: in Canada, lawyers are regulated as individuals, not as business entities, and regardless of practice size each person is responsible for delivering on the same ethical commitment to the public, the profession and the justice system.

The actual answer is slightly more complicated. At the conference, I will be arguing that there already exists a differentiated system of governance and risk management practices within regulation of the legal profession and that, in Canada at least, this has benefited both the public and the profession.

Client complaints are one measure of how well self-regulated professions perform in terms of maintaining meaningful practice standards. Claims patterns are also useful as potential signposts of stresses or gaps in training and support services available to lawyers in practice.

The largest complaints about lawyers relate to communication and basic practice management. This embodies a number of sins: failure to follow through on client instructions or obtain clear instructions before acting, failure to calendar and meet deadlines, failure to establish clear client expectations of outcome or costs, failure to properly protect against conflicts, failure to return a client’s calls, etc. Failure to know or properly apply the law is far down the list.

Law, like medicine, involves not just knowing what to do, but knowing how to do it and how to manage the risk of error in getting it done. This requires an investment of time and resources in education, systems and practices to mitigate the risk of error. In large law firms, there are economies of scale and oversight structures designed to transfer that risk in large part from the individual to the firm. There are also more people to ask questions of, provide mentoring and catch errors. And there are more resources to put to the administrative tasks, freeing up lawyers to concentrate on the law and direct client service.

In solo and small firm practices, the demands on individual lawyers are profound. There is no-one else to be CEO and Manager of Business Development, Finance, Administration, HR, Professional Development, Marketing or Conflicts Checker. Solo practitioners are all of these plus the one role they trained for – Lawyer.

The Law Society of British Columbia and the Lawyers Insurance Fund have been leaders in analyzing its complaints/claims data, and working internally and with partners like the CBA to develop systems and supports to prevent problems. The large majority of these resources – like the LSBC Small Firm Practitioner online course – are designed to support those without the infrastructure of a large firm. LSBC also encourage lawyers who have practice standards issues and no or few professional colleagues to get involved in CBABC Sections.

While the ethical standards for all lawyers do – and should – apply to every lawyer no matter where you practice, I believe that the Canadian public is well served through our current model that relies on large law firms to self-manage a significant amount of risk within their practice structure, and ensures that the Law Society, CBA and others provide additional supports to help solo and small firm practitioners manage their own risk.

This article was published in the October 2010 issue of BarTalk. © 2010 The Canadian Bar Association. All rights reserved.