When it's your firm, the buck stops with you

Governance - properly exercising responsibility for one's actions in leading an organization - remains a hot business topic. A lawyer's responsibility for his or her own firm is magnified by the requirements of the profession's rules of professional conduct. These often extend well beyond the basics of individual ethical practice.

In my home State of California, for example, State Bar Rule 5.1 provides that partners and other lawyers with managerial authority in a law firm must take reasonable measures to ensure that all lawyers in the firm conform to the Rules of Professional Conduct.

The rule further provides that lawyers who have managerial responsibility within a firm are personally responsible when other lawyers in the firm violate the rules.

This is a heavy burden. In "eat what you kill" law firms, most of the lawyers fail to pay attention to management issues. They tend to be focused only on rainmaking and their own billable hours.

This leaves a lot of room for error by others - and personal responsibility for the rainmaker. It opens up a whole range of issues on how the firm allocates new work. Who makes the assignments and why - on the basis of skill, availability or favoritism? Does the firm work to ensure that lawyers, especially younger ones, are adequately trained for the work they receive? The answers can determine whether the firm is able to survive a malpractice crisis. Governance is a particularly tricky issue with regard to the growing trend of outsourcing. Legal services like transcription, research, due diligence review and patent searches can be outsourced to a virtual assistant in your own city or state, or to service providers halfway around the world.

This is not the practice of law. It's the provision of high-quality, low-cost legal support products and services for licensed attorneys. Because the work is delivered electronically and is produced under the firm's supervision, it is transparent to the client.

But the responsibility for ensuring that it is done properly rests with you, as a licensed attorney.

The same principle holds true if another attorney outsources legal work to you. The lawyer who engages a contract "pinch hitter" to make a special appearance in a local court obviously becomes responsible - in a malpractice sense - for any errors committed even in a seemingly simple case.

However, court decisions have also held that attorneys making even a brief special appearance can also be held liable in malpractice actions against the firms that engaged them - even if the malpractice had nothing to do with the contract attorney's own services.

There are many other applications of the governance principle. An attorney who engages an outside source to enter content onto a website or blog still has legal responsibility for the content.

Firm administrators, no matter how grand their title, are responsible only for profits, organization and efficiency. The firm's lawyers, either collectively or as a management committee, are responsible for the strategy and future growth of the firm and the quality of legal services delivered.

In these and other examples, the message is clear: In your firm, the buck stops with you.