Reprinted from:
October 2005
According to the U.S. Bureau of Labor, most companies that experience a major disaster are no longer in business within five years. Why? Because only 25 percent of U.S. companies consciously prepare for disaster recovery. Most do nothing.
Regardless of what catastrophe you (or your clients) may face, the more that you plan, the easier and faster your recovery. Here are some basics to help you prepare for the worst case scenario:
- Conduct a firm risk assessment. Analyze the possible consequences of a disaster. Review your current state of readiness; look for weaknesses. Review your insurance policies, emergency evacuation procedures, alternate work sites, and information and document storage.
- Prepare a specific disaster recovery plan manual. Spell out exactly who does what after a disaster. Create a disaster recovery team or a committee of key personnel. Examples: emergency supplies, computer services, documents and records, personnel safety and staff welfare, insurance claims and client contact.
Identify the committee members to all staff and to the building managers. Regularly convene the committee to review the manual, revise the procedures and do a run-through.
- Review (or establish) your insurance coverage. Insurance is a central aspect of disaster planning and recovery. Understand the fine print. Your policy should be tailored to your specific practice. It should cover damage to or loss of real and personal property, loss of revenue, general liability, reconstruction of destroyed documents, and extra expenses related to a disaster or catastrophe.
Think about crime, kidnapping, and automobile and officers' liability coverage. Depending on your location, consider additional coverage for natural events as earthquakes and floods.
- Inventory. Create a complete inventory and photo-document your entire office with all its contents (before and after) to prove losses.
- Emergency communication. Create an emergency system, and include lawyers, staff, clients, vendors, and the court, depending on the nature of your practice. For internal communication, set up a call-in "hotline" or recorded message number to keep personnel informed. Establish a "phone-tree." It typically is easier to call out of, rather than into, a disaster area, so establish an out-of-area contact.
Assign one staff member to contact clients and vendors, to let them know what has happened, and explain the status of their pending matters. Be truthful, credible, and convey that the crisis is being handled properly, and that the firm will continue to take care of all clients' needs or vendors' concerns. Store phone lists in multiple off-site, accessible locations.
- Buy Cell Phones. Frequently in times of disaster, businesses experience an interruption of electrical power, which shuts down phone systems. Have at least one cellular telephone.
- Plan for temporary space. Contingency space planning ranges from a temporary control center for your disaster recovery team, to finding temporary office space for transferring the entire firm. Contact building managers and real estate agents in advance to establish contingency. Arrange access to compatible computer equipment. Consider a reciprocal arrangement with another firm that uses similar computer, accounting and litigation support equipment.
- Back up all computer data. Store important records and documents off-site. Everything you save on the computer should be backed-up on a regular basis. This also applies to crucial paper records such as master files, time and billing records, court dates and appointments, wills, powers of attorney and corporate records as well. The frequency of computer back-ups depends on how much work you produce between back-ups and how much you can afford to lose. Store all important data and paper backups off-site.
- Consider installing a computer program that will be able to undelete/reclaim files that are inadvertently -- or intentionally -- erased.
- Have a plan for returning to business as usual. A critical responsibility of a law firm after a disaster is to resolve or move along all current cases or work-in-progress. You may need to get a continuance or reschedule a deposition. You might want to refer some or all cases to another lawyer or firm. Are the case files current and accessible?
- Funds. You will undoubtedly need to disburse funds for rent, payroll, settlements, etc. A disaster will likely interrupt work in progress and continuing practice development, so give the collection of existing accounts receivable top priority.
- Establish a solid relationship with your banker. Maintaining close contact with your bank will help if you need an emergency loan.
- Establish an Employee Assistance Program. Valuable staff are important during normal times, and indispensable in disasters. But by virtue of their relative lack of capital as compared to partners, employees tend to live more closely to their means, and typically are in a more precarious financial position after a disaster. Consider creating a fund for your staff, which could be set up with the firm matching grants to employee contributions.
- Have a written succession plan. A clear plan for succession can help the firm survive, and can smooth the transition, should a primary rainmaker or managing partner die.
- Problem Relationships. Disasters are not limited to natural events. Disgruntled employees, unhappy clients and deranged strangers have wrecked havoc on law firms. When employees depart, obtain all keys, computer disks and other proprietary or confidential documents that may have been taken home or offsite. Employee agreements should acknowledge that certain (be specific) information is confidential and proprietary and always remains the property of the firm. Control access to your premises: Create or improve a security plan under consultation with risk management or security experts.
Reprinted from the October 2001 issue of Law Technology News
