File reviews are one of those tasks that few people enjoy doing.  With competing priorities and demands on firms’ and supervisors’ time they can often be deprioritised or abandoned in favour of more pressing responsibilities.  However, they can be a source of valuable information and unexpected intelligence about what is happening in your firm; you will see examples of good practice and, possibly, risky practices that could expose your firm to a complaint or worse.  There are few better risk management tools for a firm than a systematic approach to reviewing fee earners’ files.

In order to achieve outcome (7.8) in the SRA Code of Conduct 2011 the SRA says that you must “have a system for supervising clients’ matters, to include the regular checking of the quality of work by suitably competent and experienced people.”  A key aspect of the SRA’s approach to regulation is the ability to evidence the achievement of outcomes and I can think of few better ways to demonstrate that a firm is achieving this particular outcome than by a documented series of file reviews with relevant corrective actions identified and completed.

The first challenge in implementing a successful file review process is using a set of predetermined criteria for selecting the files for review.  Many firms will select files at random and, whilst there is nothing to prevent you from taking this approach, you may want to consider a more targeted approach to help you hone in on what could be problem files.  Examples of criteria to consider include: files where there are high work in progress figures; files where no bill has been rendered for some time; credit balances on client account for considerable lengths of time; files that have been open for a number of years and, perhaps, some purely random matters.

Once you have selected your files for review, you may want to consider whether you will break the process down into two stages: a compliance review followed by a legal subject review.  The first, checking for regulatory compliance and complaints-related risks; the second, checking for legal and claims-related risks.  Alternatively, you may decide that you will encompass both areas within the same review.  The approach you will take to this really depends on the firm’s resources and availability of reviewers.

Next comes the more challenging aspect of the review process: finding the time to do the reviews; completing them – identifying any areas of good and/or bad practice and corrective actions; and, following up on those identified actions to ensure that good practice and compliance with your firm’s policies and procedures is emphasised and reinforced.  Lots of hot drinks and sweet treats can make this part more bearable!  Sometimes having a day per quarter or per month (whatever your chosen frequency) on which the reviewers meet and have dedicated and uninterrupted time to review the files can work well.

The data and management reports you can extract from the file review process are invaluable: which departments are performing well and which are not doing so well?  Do you have a rogue fee-earner who is putting the firm at risk?  Are any fee-earners struggling or need extra support?  Are there unexpected ingrained risky practices or examples of unethical behaviour that you need to tackle?

In summary, file reviews may not be the most enjoyable aspect of running a good law firm, but they perform an essential function in your arsenal of risk management tools!