Managing File Handoffs

Managing File Handoffs

Believe it or not, file handoffs can lead to trouble if not properly managed. It doesn’t matter if the handoff is from a partner to an associate, from one firm to another post referral or purchase of a practice, or if it is sent to a new firm or attorney after the current attorney’s practice has ended due to death, disability, retirement, or disciplinary action. There are concerns that should be addressed any time a file is transferred and here’s why. An attorney’s liability for a client file isn’t necessarily limited to the decisions made or actions taken solely during the time he or she is personally responsible for doing the work on any given file.

Consider a partner to associate handoff. The partner’s perspective is that the work being handed off is routine and an assumption is made that the associate would ask if there were any questions or concerns. Further, the partner also believes that the introduction of a new client that comes with the handoff will support the associate’s efforts in client development; and, due to the limited number of files that have been previously transferred, the associate certainly has the time. Unfortunately, the type of work being transferred is new to the associate and he feels less than able to ask for assistance because he believes he has been asking too many questions already. After all, this associate wants to avoid being viewed as struggling or worse yet, as not cutting it. In addition, without training in client development, these introductions have tended to go nowhere so he has little excitement about meeting another new client. Finally, three other partners have also “dumped” a significant amount of work on him this past week and, frankly, the associate was overloaded before this handoff happened.

An unintentional misstep is a real possibility here. It could be a blown deadline, a missed issue in a poorly researched document, the passing along of incorrect legal advice, or significant over-billing due to hours of research that the now upset long-term client has no intention of paying. At a minimum this scenario underscores what can happen when one runs with assumptions. It is also an example of where mentoring could be of real value. Regardless, with file handoffs, an understanding that no question is too stupid to ask coupled with a policy of the partner’s door is always open can do wonders. Further, if work transferred to an associate will come from several sources, one partner should be responsible for monitoring all work assigned in order to make sure the amount of work assigned is reasonable and to monitor docket control and file management processes. It’s all about building in accountability because the partner and firm will remain liable for what happens post file handoff.

Here’s how a handoff that occurs via referral, after the sale of a practice, or as an attorney is going into retirement can go south. The client is not made aware of all the options that are available to clients who need to be handed off and the receiving attorney eventually bungles the matter for whatever reason. It could be incompetence, overwork, poor office systems, impairment, or even a staff misstep. Negligent referral claims can and do arise under such circumstances and they can be even more problematic if the referring attorney was compensated for the handoff in some fashion and/or the receiving attorney has no malpractice insurance. The bottom line here is when advising a client about who to work with, treat that advice as legal advice because that’s how the client will view it. Keep your client’s interests front and center. It should always be about what’s best for them.

Now let’s flip this and look at assumptions a receiving attorney might make, not the least of which is that all previous work done by the referring attorney was completed in a competent, thorough, and timely fashion. But what if it wasn’t? Receiving attorneys should never blindly trust that all prior work on any incoming file is without error. Incoming files must be timely reviewed and clients informed of any problems found because in time the receiving attorney can become liable for the entire matter. Again, this is how the client will see it if a problem rears its ugly head months or years later. They will have expected you to have thoroughly reviewed the incoming file, regardless of the reason the file was transferred.

Given that missteps can and do occur as a result of a file transfer, in addition to client consent, always remember to document the how, when, and why of the transfer. If able, also confirm that the receiving attorney is up to speed on the current status of the file and prepared to move forward.

The attorney who hands off a file should be cautious about his or her response post transfer as it is too easy to adopt an “out of sight, out of mind” attitude. While the file might be gone, liability for the file often isn’t, particularly with an in-house transfer or a less-than-total handoff outside the firm. Sometimes the misstep can be as simple as an inadvertent failure to file a formal notice of substitution of counsel. Finally, any receiving attorney would be well advised to also consider if any conflicts of interest issues are in play. Serious conflict claims can arise even within firms when transfers occur between locations of a firm and there is no true firm-wide conflict checking system in use. A missed conflict can not only lead to a lost client but a viable malpractice claim as well.

While not an exhaustive review of all of the issues that might arise due to a file transfer, hopefully this helps raise awareness that bright lines of liability do not exist in file transfers. Successful handoffs require awareness about what has been done and what is to be done by both attorneys involved. Add into the mix a clear focus on what’s going to be best for the client post handoff and the odds of a problem eventually arising are going to be much lower than they otherwise would have been.

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Since 1998, Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1200 law firm risk management assessment visits, presented over 600 continuing legal education seminars throughout the United States, and written extensively on risk management, ethics, and technology. Mr. Bassingthwaighte is a member of the State Bar of Montana as well as the American Bar Association where he currently sits on the ABA Center for Professional Responsibility’s Conference Planning Committee. He received his J.D. from Drake University Law School.