By Dana Riel and David Michael
Fifth in a Series
Conflict of interest systems are critical for maintaining ethical standards, client trust, and law firm reputation. Yet, many struggle with outdated or inconsistent processes. Here are five common pitfalls and practical solutions to address them:
- “That’s Not How We’ve Always Done It”
The status quo is a significant barrier to improvement. In today’s hyper-connected world, where degrees of separation have shrunk, your conflict check process must adapt to this reality. Relying on outdated methods increases the risk of overlooking critical conflicts.
Fix: Modernize your conflict check system by leveraging technology. Implement automated conflict check software that integrates with your practice management system to ensure comprehensive and real-time screening.
- “If It Isn’t Broken, Don’t Fix It”
A broken conflict system often remains hidden until it’s too late—resulting in embarrassing withdrawals and lost income.
Fix: Conduct conflict checks before drafting engagement letters. If a conflict is discovered mid-process, include a waiver of confidentiality in the engagement letter to address it transparently.
- “We’re Not Consistent”
Inconsistent recording of client names, related entities, and opposing parties creates gaps in your conflict checks.
Fix: Standardize the process by requiring name and entity declarations in engagement agreements. This eliminates ambiguity and ensures all relevant parties are documented from the start.
- “Everyone is Responsible” (Translation: No One is Responsible)
Assigning conflict checks to everyone often means no one takes ownership, leading to oversights.
Fix: Designate a specific staff member to handle conflict checks. This person should be responsible for entering conflict names, producing proof of search, and saving results to the matter file.
- “We Don’t Know Where to Enter Potential Conflicts”
Failing to centralize conflict data in your practice management system creates inefficiencies and risks.
Fix: Use your practice management software as the primary hub for conflict checks. Here’s how:
Initial Appointment Calendar: Enter party names during scheduling. If a prospect doesn’t appear, update the record.
Conflict Notes: Create a detailed conflict note for each matter, listing all relevant names, prior names, associations, and opposing parties. Update records for name changes or entity mergers.
Documented Evidence: Produce a PDF of the conflict check and link it to the matter in your document management system.
Legacy Documents: Ensure your legacy repository is searchable. Consider tools that index entire servers to make historical data accessible for conflict checks.
Final Thoughts
A robust conflict of interest system is not just about compliance—it’s about protecting your firm’s reputation and client relationships. By addressing these common pitfalls and implementing these fixes, you can create a more efficient, consistent, and reliable conflict check process.
The Crosspointe Consulting group is here to assist your firm in the assembling and maintenance of a system – and even migrating relevant data you need for a true conflict of interest check. You can learn more about these best practices at: https://www.michaelmatters.com/PMBR_Checklist.
See also:
Business of Law: Confidentiality and Data Security
Business of Law: Competence Clarified
At Crosspointe Consulting Group, we recognize that legal professionals often rely on established software platforms to manage their financial and operational needs. With our in-depth knowledge of Sage, QuickBooks, and other legal software, we are dedicated to helping you unlock the full potential of these systems. Our mission is to provide expert guidance and support, empowering your firm to operate efficiently and effectively.
