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Ticking the box1 March, 2017
There are many benefits to developing and using checklists. They provide a framework for good supervision, they quality assure work and they provide good staff development.
Whether you are a transactional lawyer or a litigation lawyer, the current legal environment is more complex and fast paced than ever. Whether doing high level legal thinking or more routine work in running a matter, there is much that needs to be remembered and done.
While it is important to get the high level legal thinking and work right, there have been many claims against law firms and practitioners because something was missed in the “routine stuff”. This happens even when a practitioner is experienced in a particular type of matter.
Examples of mistakes include failing to:
- register a charge, mortgage or security interest at the end of a matter
- conduct searches in a conveyance
- address how GST will be treated in the contract
- confirm instructions in writing to sell shares when administering an estate.
These mistakes often happen when the matter is complex, fast-moving, slightly out of the ordinary or has a tight deadline. Managing workflow well is a sign of a well-run and effective firm that is less likely to have professional indemnity claims.
Successful firms plan workflow management. Not only do they have clearly articulated and well-written policies that support the business strategy, they have written procedures and checklists to support those policies.
Procedures are defined as a document written to support a policy. It is a written description of how an activity is to be undertaken. A checklist is a list of actions or items to be done or checked. It is a type of informational job aid to compensate for potential limits of human memory.1
Developing and using checklists helps to avoid simple mistakes and provides quality assurance for your clients.
For practitioners, keeping track of all of the issues and steps required in a matter without a checklist is a high risk strategy. We know legal work is becoming increasingly complex and we are all increasingly busier, so why would you want to rely on memory?
As a management tool
Checklists are essential if you are delegating work. “Tips of effective supervision”2 is one of the tools provided on the Legal Practitioners’
Liability Committee (LPLC) website.
It lists nine actions for supervisors − a checklist in itself. It recommends having policies, processes and procedures documented to give staff clear direction on what is expected of them. Checklists also make it easier for staff to manage what is required, whether they are experienced or not, and for supervisors to check that the work is being done to the right standard.
It may seem obvious, but checklists make a difference. In one LPLC claim, a practitioner was acting in the purchase of a franchise business. After settlement, the purchaser client was contacted by a bank who asserted a registered security interest over the plant and equipment of the business. The practitioner had been busy in the lead up to the settlement of the purchase and failed to conduct a
search of the personal property securities register (PPS register). He knew and understood about the PPS register but forgot to conduct the search. He had no checklist to ensure nothing was missed.
In other professions
Most professions have embraced the use of checklists.3 The aviation industry uses them extensively to ensure routine work is done and nothing is missed. They are also used when emergencies arise to assist in keeping everyone focused on dealing with the emergency as efficiently and calmly as possible.
There has been some research into the power of checklists in the medical profession. American surgeon and author Atul Gawande describes research into the use of checklists by surgeons in his book.4 His team studied what happened when
doctors used a checklist when performing complicated medical procedures instead of relying solely on their experience
and instincts. It was a two-minute checklist that covered simple steps such as ensuring blood was available and antibiotics were used.
The study showed that using the checklist greatly improved results by eliminating many of the basic mistakes. It also required theatre teams to know each other by name. By voicing their name at the start, staff were more confident to speak up if they thought there might be a problem. These simple steps resulted in the average number of complications falling by 36 per cent and deaths by 47 per cent.
As you might expect, Gawande encountered some resistance. About 20 per cent of the surgeons who used the checklists said it took too long and did not improve the safety of care. When those same surgeons were asked if they were going under the knife would they want
the checklist, 93 per cent said they would.
Gawande is quoted as saying: “Our great struggle in medicine these days is not just with ignorance and uncertainty. It’s also with complexity: how much you have to make sure you have in your head and think about. There are a thousand ways things can go wrong”.5 Does that sound familiar?
There are some differences between surgery and law, but legal matters are complex too. Even the most basic conveyance is actually a complex procedure.
Firms will often create their own checklist by tapping into the collective wisdom and experience in the firm. A written checklist is liberating as it puts best practice on paper and saves people having to reinvent the wheel for each and every matter, freeing them up to work more efficiently and effectively.
LPLC has written various key risk checklists to help firms avoid claims.6 These are based on the mistakes we see in claims. They are not a comprehensive checklist for every matter but can be used to augment any checklist a firm develops.
There are also resources available on the internet to help with writing checklists.7
Wills and estates
Wills and estates is a good example of a practice area that on the surface appears to have a lot of routine work but also has more complex law behind it where things can go wrong. There are three key risk checklists on LPLC’s website dealing with:
• preparation of wills
• testamentary capacity
• family provision claims.
Checklists are important to ensure issues are not missed when preparing a will or winding up an estate.
In one claim a practitioner was co-executor with one of the beneficiaries. The estate was realised and called in, and specific bequests were paid. There was no appreciable delay but the estate managed to straddle two financial years. An accountant was asked to prepare the two tax returns. The beneficiary executor was given a copy of the returns and the accountant’s assessment which stated that one return would involve a refund and the other would require a payment.
Soon after receipt of the refund, the probate clerk organised for the estate to be finalised. The executors and the clerk forgot about the second tax assessment, which arrived after the estate had been finalised. As predicted by the accountant, this assessment required a payment of some $16,000. A checklist showing the outstanding tax assessments would have helped to avoid this claim.
Conveyancing is another area of law which has routine but where it is easy to miss something that could be significant for the client.
We regularly receive claims where steps in the conveyancing process were missed or issues not dealt with. Claims that may have been avoided if a proper checklist had been used include:
- failing to address the GST treatment in the contract
- not conducting appropriate searches to ensure the property is in the right zone for its use
- not checking the planning permission for a property
- not asking about building works on the property and so missing the owner-builder requirements
- not asking for the title at the start of the retainer resulting in a delay in settlement when the title could not be found.
In one claim the experienced property practitioner advised his purchaser clients pre-contract about the purchase of vacant land they were intending to develop. The practitioner failed to bring to the clients’ attention a planning certificate in the s32 statement and the Development Plan Contribution Overlay – schedule 2 referred to in the planning certificate. Had the clients been told about the overlay they would have known before they signed the contract that they would be subject to a significant payment to the local council to do their proposed development. They said they would not have gone ahead with the purchase if they had known about the payment.
The practitioner said it was his usual practice to print out a copy of the overlay and send it to the client with advice about its effect. There were many other issues the practitioner advised on for this contract and it was done in a relatively tight time frame. The overlay issue was simply overlooked. Having a checklist, even for the experienced practitioner, would have avoided this claim.
LPLC now has two comprehensive checklists for issues to talk to the vendor client and purchaser client about regarding a conveyance. While some issues will not be relevant for all matters, having them listed means they will not be overlooked.
The LPLC column on p63 also refers to two new checklists. One is to help practitioners raise tax issues with their clients so nothing is missed. The other is a GST checklist that deals with issues to be considered when assessing GST on the sale of land.
Spending time working on your business is as important as doing the legal work. Developing and implementing good workflow management is an important part of your business and should not be ignored. Work with your staff to develop robust checklists that help manage the work and assure quality.
For employed staff, spending time managing your workflow is part of your role. You should have a lot of input into how checklists and procedures are developed and used.
Don’t look at checklists as another thing to do but as part of the way you manage quality assurance of your work.
Heather Hibberd is LPLC chief risk manager. She has written and more recently edits the LPLC practice column in the LIJ, writes LPLC’s newsletter In Check and has contributed to the International Bar Association’s book, Risk Management in Law Firms, Strategies for Safeguarding the Future. She speaks at LIV and other seminars on risk management for lawyers. The author acknowledges the assistance from LPLC Risk Manager Matthew Rose
1. Wikipedia – definition of checklist.
2. Legal Practitioners’ Liability Committee, https://lplc.com.au/checklists/ tips-effective-supervision.
3. Extracted from a talk by LPLC Risk Manager Matthew Rose, Managing risk throughout your practice, 2016 Metro Series, Legal Practitioners’ Liability Committee.
4. Atul Gawande, The Checklist Manifesto: How to Get Things Right, 2011 Picador.
5. Interview with NPR Morning Edition host Steve Inskeep on 5 January 2010, see www.npr.org/templates/transcript/transcript.php?storyId=122226184.
7. A good place to start is at www.legalproductivity.com/practice-management/checklists-for-lawyers/.