Every strong attorney-client relationship is built on mutual respect, professionalism and ethics. Law firms must abide by a strict code of ethical standards to ensure they are providing clients with fair and effective counsel and appropriately safeguarding their sensitive information and assets. Attorneys and law firm leadership who fail to effectively prioritize strong ethical practices can suffer severe career, reputational and financial consequences.
Florida lawyer Jeffrey Siskind’s recent disbarment offers a prime example of how ethical violations can irreparably alter an attorney’s career. In 2013, Siskind was hired to safeguard $2 million in a trust account for a client who was serving an 11-year prison sentence. Instead, he transferred the funds to a company owned by his father, also a former disbarred attorney, and used the money for his own personal use. In another instance, Siskind defrauded a long-term client, encouraging him to place his real estate exchange proceeds into a company Siskind failed to disclose he had a personal financial stake in. The client’s funds were never full returned to him, though he was promised a “Like Kind Exchange” would take place. As a result of his behavior, Siskind was permanently disbarred after a Florida Supreme Court ruling earlier this year.
Protecting Clients and Credibility
When an attorney betrays a client’s trust, it can publicly erode a firm’s credibility and expose them to risks including malpractice claims and financial penalties. It is important for law firm leadership to remember that professional liability insurance policies do not cover acts done with criminal intent. Even when a single lawyer acts alone, the law firm they represent could be held liable for their conduct and the financial and reputational burden it causes.
Law firms must be equipped with strong internal ethics protocols to protect clients and reinforce employee and client relationships. A few proactive measures include:
- Conduct thorough background checks: Before hiring any attorney, law firm leadership shouldverify their credentials, conduct a background check and consult professional references. Doing so will help firms to identify red flags and past behavior that could indicate ethical problems in the future.
- Perform regular account audits: Law firm leadership should conduct internal audits of casework and accounts payable to identify any discrepancies. Such reviews allow firms to assess their attorneys’ practices and financial processes, address gaps and make security improvements. An insurance professional who specializes in the legal industry can help establish effective risk mitigation strategies and ethics procedures.
- Develop comprehensive checks and balances: Administrative and accounting responsibilities such as authorizing transactions, recording financial data and reconciling accounts should be separated from attorneys to ensure accountability. Having another team member who is not closely involved in casework complete such tasks will help limit fraudulent behavior. Law firm leadership should work to foster a culture of transparency where team members expect to be held accountable for their actions and can feel comfortable reporting possible discrepancies.
- Invest in regular ethical training: All firm employees should be required to complete ethics training at hire and annually thereafter, at minimum. Training and refresher courses should outline the firm’s ethical protocols, fraud prevention strategies and red flags to look out for to limit misunderstandings and violations.
Law firm leadership can better protect their clients’ and firms’ best interests by adopting a proactive approach to preventing ethical misconduct. An insurer specializing in the legal industry can help law firms better understand the limitations of their professional liability insurance coverage and offer risk mitigation strategies and input on their ethical protocols. To learn more about First Indemnity’s Professional Liability Insurance Offerings, visit https://firstindemnity.net/insurance-products/professional-liability/.