A successful, trusted attorney partner is an invaluable asset to a law firm. But with that title, comes power and great responsibility. And if law firm leadership does not carefully consider potential partners and hold them accountable for unacceptable actions, they could be putting their businesses at risk.
Chicago attorney James Rollins was disbarred by the Missouri Supreme Court after deceiving his law firm partners. Rollins falsified documents to claim he paid more than $80,000 in expenses toward his $100,000 contribution for partial firm ownership when in reality, he only paid about $18,000. When he was confronted by his partners, he admitted to his actions and paid his full contribution. Despite making good with the firm financially, Rollins went before the Illinois Supreme Court, which suspended him for 5 months in October 2023.
Not only could Rollins have been subjected to criminal charges, he could have also been the source of financial hardships on the firm, adversely impacting his partners and team members. Rollins’ example demonstrates why law firm leadership cannot depend on trust alone with their partners. They must appoint partners carefully and develop practical checks and balances to maintain accurate records and hold them accountable for their actions.
Insurance implications
Unfortunately, in situations involving a deceptive partner, there is little an insurance policy can do to make the firm whole again when it all comes to a head. In fact, in some cases, if a partner knowingly commits illegal or deceptive acts, the insurance policy can become invalid. In Rollins matter, he was suspended and disbarred, but had he not paid back his law firm, the firm likely would have had to absorb the loss.
Holding your partners accountable
While some accountability measures may seem unnecessary or monotonous, law firms operate and succeed on the work of their partners – keeping accurate financial records, managing their teams and more. Consider the following best practices to choose a partner you can trust:
- Be selective: While a charismatic partner might seem like the right choice at first, law firm leadership should never tap a new partner without conducting proper due diligence. Partners should be chosen based on their expertise, track record, references, understanding of law and much more.
- Implement protocols: Law firms should have protocols in place that require case work checks, regular bookkeeping reconciliation and document verification. In matters like that of Rollins, for example, reconciliation would have identified any financial discrepancies and stronger document verification processes would have prevented Rollins from submitting false receipts or checks. An insurance professional who specializes in the legal industry can help law firm leadership develop effective protocols, that consider the firm’s insurance coverage.
- Prioritize communication: Communication across law firms can help provide comprehensive checks and balances. Leadership should prioritize regular communication through planned meetings, as well as through casual check-ins during the workday. In an environment that fosters communication, team members from the top down are also more likely to report possible discrepancies.
A good system of checks and balances for a law firm can reduce occurrences of deception, both deterring people from engaging in malicious activity and quickly identifying it when it happens. Consider partnering with an insurance professional who specializes in the legal industry to help evaluate your partner selection process and to help develop protocols that hold partners accountable for their actions and keep the firm out of trouble.