Don't lose sleep - 9 tips to cut the risk and get your file management system in order

Professional indemnity specialist Anne Kentish from Kennedy’s reveals why file review is so important – and her tips for an accessible, comprehensive system.

With the advent of hybrid working, and electronic files, are we waving goodbye to waking up at 3am with a feeling of dread about what is happening in a file and wondering how early we can get to the office to check the position? Possibly, but perhaps it is more likely that the 3am wake up calls are still happening, but now we just have easier access to the files.

So how do we try to ensure better sleep? One way is to put procedures in place to take away the feeling of dread that a file has grown dusty.

The story starts with file management. Solicitors think they know exactly what is on a file. We rarely do and why should we? The file is there so that we do not have to rely on our memory.

Before emails, a letter or fax would arrive in the office. While it might sit in an in tray for a while, it would usually make its way to the file within a few days. With outgoing mail, a file copy would be printed for the file. One incoming, and one outgoing, piece of mail. Not very complicated, and if the filing was up to date, the system usually worked.

With the advent of emails, multiple recipients and electronic files, how do we make sure that we do not end up with multiple copies of the same email on the file or, worse, no copies at all on the file?

If we bear in mind that the file is there to provide as accurate a record as possible of the transaction or case, then whatever system you choose, make sure it works. Some solicitors still employ administration staff to file emails.  Other solicitors do their own filing. Many case management systems allow emails to be generated directly from, and automatically saved to, the file, and some now use AI to some extent.

Whatever the level of sophistication of your case management system, make sure there is a consistent process for filing correspondence. From a risk management point of view, do not assume that someone else will file an email. It is better to have multiple copies than none at all, and the file can always be tidied up at a later date. 

It is good risk management practice to file email correspondence as you send it or as soon as you receive it, even if you do not have time to deal with it there and then. Doing it that way means the file will be instantly up to date; having to file a multitude of emails at the end of a long day will likely be something left for another day.  If someone is off unexpectedly, the file will have a better chance of being up to date if everything is filed at the time.

Now that the files are in working order, what next? Do not just ignore the file or rely on your memory.

A file review is not a new risk management tool. File reviews have been around for years and should be around for many more.

What constitutes an effective file review?

• Look properly at each file. Whether you work from hard copy or electronic files, look at each file and check what is happening, or not happening.
• Was the letter of engagement and any scope of work clear, and did it contain sufficient detail?
• Have all anti money laundering, sanctions, and conflict checks been correctly dealt with?
• Has the transaction been appropriately risk-assessed?
• Has the client been given details of the firm’s complaints procedure?
• When was the last time anything happened on the file?
• Are you waiting to hear from someone? If you are, and it has been a while, drop them a line to gently remind them you are waiting to hear from them. Have all important dates been diarised and, crucially, met?
• Have you reported to your clients recently? If not, drop them a line, just to bring them up to speed. Lots of complaints arise from clients who feel their solicitors have not kept them up to date, so a short email confirming the current position, even if nothing much is happening, can work wonders.
• Build in a ‘second pair of eyes’ check to your file review procedure. Enlisting a colleague to check a file allows a fresh perspective on difficult issues and minimises the possibility of an important point being overlooked.

There is little point in looking at the file, noting that something needs to be done and then not doing it. If you are not able to deal at that moment in time, make a note to deal later when you can.

Your timetable for file reviews will depend on the size of your practice, and the nature of your work. Make sure you put a system in place for regular reviews, sampling a sufficient number of files each time, again depending on your caseload.

No doubt this might be seen as yet more work to do in an already busy day, but file reviews do not need to take long and should help to avoid the sleepless nights!

For a useful tool to assist with file notes, see Lockton’s guide; Managing Risk – conducting effective file reviews, which includes a template checklist for practitioners.

Anne Kentish is a partner at Kennedys specialising in professional indemnity insurance, with a particular focus on defending legal professionals facing claims and complaints.