One of the fascinations of a career in family law is that the factors which motivate a client to adopt a particular stance often differ from those which drive a commercial transaction. We have all acted for the guilt-ridden husband who, for a short period, expresses a willingness to give his wife far more than that to which she would otherwise be entitled and, separately, the wronged wife who initially wants to settle for far less than her entitlement to “keep the peace” and restrict legal costs, without her having any idea as to how much she will need to keep the family solvent in the future.
Such scenarios present unique problems from a risk management perspective but, like so many aspects of management, the key is little more than the sound application of a commonsense approach.
Risk management is all about eradicating, or at least minimising, the possibility of complaints or claims. Each is hugely debilitating in terms of induced stress, the time consumed in responding, the cost of that time and the possible loss of reputation, before one even begins to consider compensation that might have to be paid or increased Master Policy premiums.
Good risk management begins earlier than many practitioners realise. The employment of good quality staff, with appropriate experience and training, is essential. Best of all, grow your own! One knows from personal experience the value of qualified and administrative staff alike knowing your systems and being comfortable with them. Accordingly, it pays to recruit top quality trainees and junior support staff, to induct them with your well established techniques, and to encourage them to stay with you on qualification. Conversely, rapid turnover of staff is destructive on morale and significantly increases the element of risk. So be prepared to pay well and be flexible with conditions of employment. Retention, retention, retention!
Similarly, it is a false economy to restrict the number of solicitors working in your team, on the pretext of cost cutting. More solicitors means: (i) swifter turnaround of work, i.e. greater efficiency; (ii) less likelihood of silly mistakes; (iii) more satisfied clients; (iv) better cash flow; (v) more referrals from satisfied clients; (vi) more profit; (vii) less stress on staff; (viii) better work-life balance; (ix) significant reduction in risk.
So it’s a “no brainer” – don’t skimp on the staffing!
I particularly advocate a partner sharing a room with a trainee, and the trainee attending meetings and consultations, taking notes on telephone calls etc. The osmotic effect is such that you end up with a trainee schooled in the way you want things done, and that results in a significant reduction in risk when the trainee qualifies.
Looking at the more mundane aspects of risk management, it goes without saying that one of the keys is to ensure that you operate with accurate information. It is important that you have a comprehensive “new client form”, and at the first meeting you should note every conceivable item of information that you might ultimately require about the client, including full names and dates of birth of the whole family, national insurance numbers, full contact details etc.
The letter of engagement needs to be succinct and accurate, and if the scope of your instructions is extended at any time, you need to write to the client to qualify the original engagement letter.
As a member of the panel of solicitors appointed by the Society’s Master Policy insurers to advise on claims in family law cases, the poor quality of file notes made by some solicitors never ceases to amaze me. Good file notes, coupled with correspondence to confirm instructions given, are the most effective antidote to complaints and claims. Very often claims arise from misunderstanding of the client’s expectation, and file notes and correspondence greatly assist in clarification. In a family law case, there is often a need to indulge the client to some extent by listening intently to his/her tale of woe. In that situation it helps enormously to have somebody else, e.g. a trainee or assistant, make the notes.
It undoubtedly helps to extend the notes of a meeting as soon as possible, and the notes should be sent to the client to check for accuracy and as an aide memoire.
Files should be kept in strict chronological order, including the progression of draft documents. Always keep each draft in the sequence as it unfolds, and make sure that the drafts are dated. Copies of the developing draft should be retained on the correspondence tag and not in the back of the file.
Although the ever increasing use of negotiation, mediation and collaboration has greatly reduced the extent to which family law is thought of as a litigation based discipline, one still needs to have in place a watertight diary system. I would advocate either the insertion of all court dates into the calendars of two separate fee earners, or the use of a court diary to back up the calendar of the individual fee earners. Either way, there has to be a double entry system to eliminate the possibility of a diet being missed. Although time bar is not traditionally a problem in family law cases, the provisions for cohabitants in the Family Law (Scotland) Act 2006 have changed all of that.
Nowadays a significant proportion of family law cases end with the preparation and execution of a minute of agreement. This produces its own aspects of risk. You should develop your own style, but don’t forget that the use of a master draft, while a great labour saving device, is itself fraught with risk. Every clause needs to be checked word for word and all complex clauses should be composed separately, either on a PC or handwritten. With regard to designations, many solicitors prefer the less formal “Mr Smith” and “Mrs Smith”, but in my view this is a risky practice because a misplaced “s” can change the whole tenor of the agreement. It may be archaic but I much prefer “the First Party” and
“the Second Party”.
The watchword in preparing minutes of agreement is “precision”.
At the point when the agreement is signed, it should be absolutely clear which party is to end up with each item of matrimonial property and which party is to be responsible for each item of ongoing expenditure. There is no need to mention in the agreement those items which are to remain in the ownership of the party which solely owned them immediately prior to the agreement being executed, but the client needs to be quizzed to ensure that he/she is in no doubt about the true ownership position.
It makes sense for all agreements to be checked by a second member of a team, to ensure that no silly errors, or transpositions of parties, have crept in. Similarly, the client must be told to read every clause in an agreement with great care before signature. It is undoubtedly better to get the client into your office and isolate him/her to give him/her time to read the agreement in peace before signing, rather than sending it out for signature. Either way, the circumstances of signing should be clearly documented on file.
At the point when your client signs the agreement, you should clarify who is to attend to each aspect of the implementation of the agreement, whether it be the transfer of title of the matrimonial home, the surrender of a life policy, or whatever. At the same time, you should clarify which party’s solicitor is going to attend to the raising of divorce proceedings, and communicate with the other side about this. Never send a file to storage without ensuring that each clause of a judgment or agreement has been implemented.
Ticking all the boxes
Three other points come to mind for family law solicitors.
First, ensure that you conduct regular file checks. Many clients come in initially for “what if” advice. What would be the rights and obligations if separation occurred? It is important to follow up on such files, even if it is just to render a fee for advice tendered.
Secondly, it is necessary to have in mind the capital gains tax implications in a case, and in particular the fact that assets other than the principal private residence can only be transferred between spouses free of CGT in the same tax year as separation occurs.
Thirdly, the preparation of a new will is often furthest from a client’s mind at the point of separation. However, very few clients would want to finalise a divorce with their ex-spouse still entitled to inherit under a pre-existing will. Accordingly, it is necessary to have the preparation of a new will constantly at the forefront of one’s thinking.
So, back to where we started. Sometimes the instructions which you get are such that you know that the client could do better if he/she went to court. I do not advocate the “I have got to withdraw from acting” approach, because we have to recognise that for many clients there is more to life than money. However, we have to protect ourselves from a risk management point of view. Accordingly, if you get instructions such as these, tell the client what the likely scenario is if he/she went to court, follow up
that advice in writing and, if the instructions are insisted upon, be prepared to draft a suitable disclaimer letter for the client to sign before the agreement is executed. The client will usually be prepared to sign such a letter and the risk of a claim is hugely reduced as a result.
Alasdair Loudon is a partner at Turcan Connell, Edinburgh
In this issue
- Discounting justice
- Common sense prevails
- Common sense prevails (1)
- Shaping the future
- Working in a one-stop shop
- Christmas lesson
- Games City
- OFT-related FAQs
- Sea change around the globe
- Covering the money gap
- Pre-trial priorities
- Personal touch
- Keeping money clean
- The lions sleep tonight
- Conversion course
- Family law risk management
- Too well known to challenge
- Temp sheriffs immune after all
- Camels and common sense
- Tough at the TUPE
- Are bloggers fair game?
- "This ain't tiddlywinks, mate"
- Scottish Solicitors' Discipline Tribunal
- Website reviews
- Book reviews
- Defining moment
- Clear view
- Joint conference success