Practice management toolkit

A compendium of practice management articles written by experts for De Rebus to support you in your practice.

Bringing advancing technology in litigation – time to explore electronic discovery

South Africa is already experiencing a ‘drain’ of data in global cases whereby lawyers and providers from other jurisdictions have to arrange to collect data from SA and then ship it back to their own country for processing, hosting and reviewing. In other words, SA is losing valuable business, which extends to arbitrations and other forms of alternative dispute resolution, as they often follow the High Court Rules. South Africa cannot be a true international center for dispute resolution until eDiscovery is adopted and incorporated into the Uniform Rules, as well as other forms of dispute resolution. Read more.

Succession planning in law firms: Some points to ponder

Over the years of activity in the profession, the practitioner would have built up a substantial practice and a good client base. What will happen to the practice after the practitioner leaves? What, if anything, should the practitioner consider ahead of leaving practice to ensure the successful continued existence of the firm? This consideration is the subject matter of this article and it is hoped that the questions raised will assist in focusing the attention of legal practitioners to this important matter. Thomas Harban from the Attorneys Indemnity Insurance Fund looks at succession planning in the context of law firms. Read more.

Who is responsible for accounting records?

More often than not, legal practitioners outsource their accounting duties to qualified accountants or bookkeepers. Reasons for the outsourcing will, for obvious reasons, differ from one legal practitioner to another. Reasons range from an inability to prepare and/or balance books, to the need by the legal practitioner to focus on their area of expertise. In this article, the Practitioner Support Unit of the Attorneys Fidelity Fund seeks to clarify who is responsible for accounting records, and what should happen to the accounting records at any given point. Read more.

Some red flag risk areas to keep a look out for in clients

Thomas Harban, General Manager of the Attorneys Insurance Indemnity Fund, notes that a lot of focus is, correctly, placed on the internal processes that law firms can implement in order to avoid or mitigate risks. The legal services rendered are aimed at carrying out mandates given by clients to the firm. The focus of this article will be on the areas legal practitioners should consider when deciding whether to accept an instruction from a client. Read more.

Exposed through passing of journal entries?

The Practitioner Support Unit of the Attorneys Fidelity Fund looks at the various definitions of journals, and for the purpose of this article, simplifies the general definition of a journal entry (journal) to refer to the entries made in the trust accounting records of a legal firm, to adjust or correct an entry that has already been made. It is effectively movement of money from one account to another within the trust account of an attorney. While passing a general journal is an acceptable way of correcting or adjusting entries that are incorrectly entered in the accounting records, they are also prone to exposing firms to risks of misappropriation and fraud. Read more.

Are you building a law firm for the future?

Emmie de Kock makes practitioners aware of some external variables affecting local law firms, which are likely to impose changes to continue growing as a law firm in the future. Strong leadership is required to lead the legal professions to and through these industry changes. The fourth industrial revolution, uberisation, shared economies and globalisation, should present fantastic new opportunities for law firms. What opportunities and benefits may it present to your law firm?  Read more.

Are you ready to start your own law firm?

To be a successful law firm entrepreneur, it is essential to have confidence. It is true what they say: ‘If you do not think the world of yourself, who will?’ For a person starting and standing alone, you must have confidence that you will be able to make it by yourself. You must know yourself. You must trust your abilities and your judgment. You must be your own best friend. You must be able to forgive yourself for failures. You must be able to award yourself for achievements. You must be able to trust others and earn the trust of others. You must be a consistent hard worker. Emmie de Kock raises aspects to think about when considering starting your own law firm. Read more here.

Managing reputational risk

Practitioners should be alive to the fact that people need information in order to form opinions, and in turn, use those opinions to decide on how to relate and/or interact with the business, if at all. Reputation is a starting point for people to interact or to abstain from interacting with the practitioner and/or his or her business. The importance of reputation stems from the fact that it is not just one aspect of you or your business, but permeates and influences you and or your business as a whole. The perception that others have of you and/or your business is an interconnected system that fuels itself and a good one is necessary for a practitioner and/or his or her business in order to grow and flourish.
Read more here.

Until a claim do us part: Does your partnership agreement address the event of a claim against the firm?

How risks can be addressed by attorneys in either their partnership agreements or other founding documents of a law firm. Read more.

Do all the services you provide fall within the ambit of the conduct of the profession?

The services provided by attorneys today have, in numerous ways, evolved from what they were in the past. This evolution and progression has affected both the content and the scope of the services provided by attorneys and is attributable to many factors, including the changing needs of the consumers of legal services, as well as legal practitioners identifying new areas in which they could potentially generate work. However, it must be noted that not all the extended services currently offered to the public and provided by some practitioners are what would traditionally be considered as falling within the scope of ‘the conduct of the profession’ or ‘the scope of professional conduct’ of an attorney. Practitioners must be aware that claims arising out of services not falling within the conduct of the profession and advice on foreign law (unless the practitioner is admitted in the respective jurisdiction) will not be covered under policy of the Attorneys Insurance Indemnity Fund. Some of the services (eg, investment advice, acting as an intermediary, broker or estate agent) not only carry their own unique risks, but also fall within the regulatory authority of entities outside of the legal profession. Read more.

Liability of directors of an incorporated law practice

There are conflicting views among legal practitioners as to whether the directors of an incorporated legal practice are liable for the debts and other liabilities of the practice or not. This difference of opinion is more accentuated in the case where one of the directors misappropriates or steals money from the firm’s trust account. So are the directors of an incorporated legal practice personally liable for the debts and other liabilities of the practice? If so, to what extent and under what circumstances are they liable? Read more.

Consider this when verifying your mandate

When accepting instructions from a client it is important to verify all aspects of the mandate. In case of doubt, it is best to canvass this with the client, rather than assume that there is a meeting of minds between the client and yourself, this prudent approach will protect both you and the client’s interests. While some may consider this approach rather tedious, a proper explanation of the rationale behind the verification will assure the client that every aspect of the matter is being properly interrogated. Read more.

Are you pursuing a legitimate professional indemnity claim?

The respective parties to a professional indemnity (PI) claim — the plaintiff’s attorney, on the one hand, and the defendant (insured attorney), on the other – are opponents in the same manner as the opposing parties engaged in any other litigation. An in-depth examination of some of the claims notified to the Attorneys Insurance Indemnity Fund has revealed that this is not always the case. Cases have been found where the litigation is, unfortunately, brought by agreement between the supposed opponents. Furthermore, the litigation is not brought to pursue the interests of the plaintiff. In some instances, it is doubtful whether the plaintiff (as stated on the documents) is even aware of the litigation being pursued in his or her name. Read more.

Client first – Leave no doubts in your client’s mind

Some of the elements of client service apply to a legal practitioner’s environment. When a client goes to a practitioner for a legal service, the client already has preconceived expectations. Your first contact or meeting with the client is crucial. The impression created at that meeting has long lasting effects. Read more.

Professional indemnity claims and breaches of the professional duties of an attorney: Is there a link?

It is important that practitioners conduct themselves in accordance with the rules of the profession at all times. A failure to do so may expose the practitioner to disciplinary action by the provincial law society and also to professional indemnity (PI) claims. Thomas Harban from the AIIF points out that not every PI claim will constitute the basis for a disciplinary inquiry against the practitioner concerned and, likewise, not every disciplinary action taken by the provincial law society will constitute a basis for a PI claim. Read more.

Susceptible to scams?
In order to position yourself and limit the probability of being scammed and – ultimately losing money to fraudsters – it is important that you have a good understanding of how your stakeholders operate, what their service offering is and how they would interact with you. Some of the attempts made by the fraudsters may appear to be obvious, but these may not be so obvious to everyone, and continue to be experienced by some legal firms. In this article, the Attorneys Fidelity Fund  will, in an attempt to raise awareness, share some of the scams perpetrated against attorneys. Read more.

Letters of engagement – documenting the ambit of the instruction given to the attorney
This article addresses the importance of recording where the practitioner’s mandate ends, namely, what services does the client expect the attorney to render and at what stage will the mandate in respect of a particular matter or instruction be fulfilled? Read more.

Does your practice have an effective risk management plan?
A practice has no control over external risks, but internal risks can be avoided, to a large extent, with effective risk management. This article, by the financial forensic unit of the Attorneys Fidelity Fund, focuses on the professional and reputational risks in a legal practice. Read more.

Applying for a Fidelity Fund Certificate
FFCs are issued by the Attorneys Fidelity Fund through its appointed agencies, namely, the four statutory law societies. The validity period for each issued FFC is a year, from January to December of that year. Practitioners are able to apply for their FFCs for the following year from 1 October of the year preceding the year for which the FFC is required. The financial forensic unit of the Attorneys Fidelity Fund explains how to apply for your FFC. Read more.

Are you in touch with reality …? Starting a new law firm = starting a new business
While running a business may seem the way to go, and while running a business can be the answer to success, it can also be a roller coaster. There are times when business is booming, but there are also times when business is flat or even seems to be buried. Tips from the financial forensic unit of the Attorneys Fidelity Fund on running your new law firm as a new business. Read more.

Are you only a secretary/administration clerk/candidate attorney/paralegal? Each and every member of the law firm has a role to play in the management of risk
Practitioners who delegate or rely on assistants should first read this article and then prescribe it as compulsory reading for support staff. By Ann Bertelsmann
Read more.

Does cyber risk impact the practitioners’ environments? By the financial forensic unit of the Attorneys Fidelity Fund
Some people think cybercrime attacks only happen to people who are tech savvy. The truth is, even the less technologically advanced people can fall victim to cybercrime attacks. If you make use of a smart device, laptop, desktop, tablet, or any other form of computer equipment which accesses e-mails, Internet, etc, you are potentially a victim to cybercrime. It therefore becomes important that as a business person you protect yourself and your firmfrom cyber-attacks. For some measures that practitioners may put in place to protect and ensure confidentiality of client information, Read more here.

Step-by-step guidelines: Default judgment by Mohammed Moolla. Read more.

What trouble are other lawyers getting into? Do you know what your own colleagues and employees are doing?
By Ann Bertelsmann. Case notes dealing with misleading clients, misleading colleagues, ignorance of the law; lack of attention to detail and administrative errors; poor trial advocacy; and oversights. Read more.

Step-by-step guide to mediation in the magistrate’s court by Caitlin Askew Read more.

Interest earned on trust current banking accounts: To be paid over monthly
by Andrew Stansfield and Robert Burawundi, Attorneys Fidelity Fund
With effect from 1 March 2016 it will become mandatory for practitioners to pay over interest earned on trust current banking accounts to the Attorneys Fidelity Fund (AFF), via the appropriate collecting law society, on a monthly basis. This amounts to a refinement on the present position whereby practitioners are obliged to pay over such interest annually. The authority for the change is contained in reg 8(1) to the Attorneys Act 53 of 1979 (the Act).
The requirement to pay over interest monthly is applicable to all trust current banking accounts operated under s 78(1) of the Act. Interest generated on trust savings or other interest-bearing accounts under s 78(2)(a) of the Act may be paid over annually.
Practitioners are advised to review their banking arrangements well in advance of the 1 March 2016 deadline and to take the necessary action to educate bookkeeping staff accordingly. Read more.

How important is practice management?
by Vincent Faris
The profit squeeze? How, given the current economic climate, can a law firm grow, and what role, if any, can or should practice management play? Read more.

The clock is ticking … Why do so many RAF claims become prescribed?
by Ann Bertelsmann, Attorneys Insurance Indemnity Fund
Why do 82,5% of all prescription claims arise from RAF matters and only 17,5% from more complicated general matters? What goes wrong? Oversights (the main culprit) and diary problems. Read more.

Find the problem before it finds you – Allowing events to destroy the vision you have of your firm can be managed and limited, but how?
by the Financial Forensic Investigation Team of the Attorneys Fidelity Fund
Ask the following questions:

  • Do you know and are you keeping watch of what can destroy your vision?
  • Do you know and are you conversant with challenges that may be posed by IT in your firm?
  • Do you keep abreast of developments in the industry?
  • Are you employing the right calibre of staff?
  • Are you compliant with the legislative and regulatory environment?
  • Have you identified your stakeholders whose expectations you need to fulfil?

Read more.

Who’s got your back? Minimising the risk of PI claims
by Ann Bertelsmann, Attorneys Insurance Indemnity Fund
It does not matter whether you are a candidate attorney, associate, single practitioner or a director in one of the larger law firms, you are always vulnerable to claims by your clients or third parties who are affected by errors or omissions that you might make in practice. What can you do to protect yourself or your practice against such claims and their sometimes devastating financial and reputational effects? There are two important, protective steps in minimising the risk of making mistakes. Read more.

Find the problem before it finds you – Allowing events to destroy the vision you have of your firm can be managed and limited, but how?
by the Financial Forensic Investigation Team of the Attorneys Fidelity Fund
Ask the following questions:

  • Do you know and are you keeping watch of what can destroy your vision?
  • Do you know and are you conversant with challenges that may be posed by IT in your firm?
  • Do you keep abreast of developments in the industry?
  • Are you employing the right calibre of staff?
  • Are you compliant with the legislative and regulatory environment?
  • Have you identified your stakeholders whose expectations you need to fulfil?

Read more.

Is your client a ticking bomb?
by Ann Bertelsmann, Attorneys Insurance Indemnity Fund
A happy, satisfied client will return and recommend you to others … But an unhappy or dissatisfied client is a potential plaintiff in a civil claim for breach of mandate, a complaint to your law society or at the very least, a fee dispute! Before taking on a potentially dissatisfied client, you need to be sure that this is a client that you will not later regret taking on. Read more.

Bridging finance pitfalls
by the Prosecution and Financial Forensic Investigation Team of the Attorneys Fidelity Fund
Law firms venture into bridging finance, especially for conveyancing matters. Why do attorneys use bridging finance in conveyancing matters? What can go wrong and how to manage the risk. Read more.

While the cat is away … Effective supervision
by Ann Bertelsmann, Attorneys Insurance Indemnity Fund
Effective supervision is not micro-managing staff; disempowering staff; or checking everything oneself. It should rather be based on a well-considered, well-coordinated supervision plan and policies; seen as a business process rather than a threat or criticism; flexible and vary depending on level of experience of the supervisee and the complexity of the work being done; and provide broad guidelines; appropriate training; regular reviews; constructive feedback; empowerment and motivation and effective delegation.  Read more.

Do you know whose money it was?
by the Financial Forensic Investigation Team of the Attorneys Fidelity Fund
Clients from time to time entrust their money and/or property to practitioners for future payments on their instructions to the practitioner/s. Practitioners are required by the Attorneys Act 53 of 1979 (the Act), the rules applicable to the various law societies and the new uniform rules to keep accounting records for monies that they are entrusted with. The new unform rules for the attorneys’ profession capture these requirements under r 35.5. Read more.
Read more about the new rules for the attorneys’ profession which come into effect on 1 March 2016.

The value of mentoring candidate attorneys
by the Prosecutions and the Financial Forensic Units of the Attorneys Fidelity Fund
The future success of the legal fraternity lies on the good foundation that ensures that knowledge and practical experience is rightfully cascaded to candidate attorneys. While this knowledge and practical experience is cascaded, it should also ensure that the character of the candidate attorney is enhanced in the process. The production of highly competent and skilled candidate attorneys is a shared responsibility among various stakeholders in the legal profession. There are many ways that can be pursued to train and prepare candidate attorneys for the practice of law. Mentoring is one of the most critical and effective ways of preparing candidate attorneys for a tough and challenging legal industry. Read more.
Become a mentor or get a mentor.