Addressing Fraud in the Law Office

Ways to Prevent and Address Fraud in the Law Office

Although most people would think the law office would be the last place for fraud to happen. This however is untrue The Association of Certified Fraud Examiners states that fraud costs the average workplace $175,000. (ADMIN, 2008). Fraud can be any false representation of a matter of fact, whether by words or by conduct that is misleading or false. This intentional deception results in harm to any company affected. Usually fraud results in inappropriate or illegal gain that is connected to the firm. Fraud is a serious issue and the statistics are getting higher each year. Addressing fraud before it starts is the key this will help reduce any legal and reputational risk. Some way to prevent fraud that the law firm could use is to set in place specific codes of conduct to help employees understand the importance of looking for fraud and reporting it.        

Employees should not be afraid of retribution for turning someone in for fraud. Fear of retribution is one of the number one causes of failing to turn fraud in. Making fraud reporting as easy and anonymous as possible will help the firm in dealing with the fear of retribution from their fellow employees. Some tips to help make reporting fraud easier and anonymous are things like, having an anonymous outsourcing tip line in place that will just print out a report of the allegations the employees can really help.  Making the anonymous person feel safe and guarantees that their voice won’t be recognized, also can help mitigate some of the person’s worry of retribution. Make sure that all the information is accurate and is also important. (Ricciardella, 2001) Law firms should make all employees aware that it is their fiduciary duty to report the fraud if they are a witness to it.

A good idea for law offices would be to have all employees trained in ethical standards of their office. Making an overall statement explaining the culture of the company is advised. Having a mission statement may also help state that the firm run operates in an ethical manner and that there is zero tolerance for fraud in the workplace. Also have a code of conduct specific for senior management to show them what to look for and how to go about resolving the issue. (Masci, 2012)

Businesses need to make sure they have programs in place to help prevent and turn in fraud in an anonymous manner. This is likely to help any employees that feel like they will be discriminated against for doing so. Preventing fraud can also help save money and protect the assets of the company, acts as a employees deterrent against any future incidents of fraud, and also helps retain some of the best employees. Most importantly setting up a program to turn in fraud make your employees feel comfortable. Anonymous tips are the number one way fraud is turned in. Having a good fraud program put in place can help the tips keep coming and help put a stop to fraud in the office.

Bibliography

ADMIN, D. (2008). Take Steps to Prevent Fraud in Your Law Practice. DMC- ADMIN, 1.

Masci, F. (2012). Detecting, Deterring, amd Preventing Fraud. PRGX, 2.

Ricciardella, A. S. (2001). Preventing Fraud How to Safe Guard Your Organization. BoardSource, 19.

Ethical Issues with Attorneys Sharing Office Space

Ethical Issues with Attorneys Sharing Office Space

By Pamela Banta, paralegal student

When you consider the state of the economy, it’s not hard to imagine that it really does affect everyone—attorneys included. Even in good economic times, it is prudent save money where you can, and sharing office space may be a good idea. Many attorneys, especially ones practicing on their own, are using shared office space with either other attorneys or other businesses. This provides great savings on paying for office space, but also creates some interesting ethical issues that need to be considered. If you already share office space or are considering it, this article has some things to consider. A written plan is an important step to be able to outline how to avoid ethical issues. (William I. Weston, Ethics Concerns In Shared Office Space, Volume 20, Number 5 July/August 2003). 

The need to avoid the appearance of a partnership is vital (see Utah Ethics Op. 86 [1988]). Conflict of interest needs to be considered. That is at least as important in this situation as in a law firm with several clients because of the risk of inadvertent discovery of information. Client confidentiality is probably the largest concern with shared office space. Often when two or more business entities are sharing office space, they share the receptionist, maybe a secretary or two, the copy room and filing areas and the conference room. All these shared things can create ample opportunity for breaches in client confidentiality. There are steps that can be taken to eliminate or at least greatly reduce the potential breaches. Caution should also be taken even in the listing of attorneys on a building directory so that it does not appear that there is a partnership where there is not. (Utah Bar Journal, Practice Pointers: Ethical Considerations for Office Sharing, by Kate A. Toomey, January 20, 2006).

Deciding with whom you should share office space with is something you need to investigate in your own state laws. In Kentucky, it was, at one time, against the law to share with a non-lawyer. That has been reversed and is now allowed. The most important thing to watch is to make sure that the other business is not a feeder business to the lawyer. (Del O’Roark, Sharing Offices: The Ethical, Risk Management, and Practical Considerations). When sharing with other lawyers, you need to make sure that it is clear to your clients and anyone walking off the street, that it is not a partnership. You shouldn’t put the two names of the attorneys together anywhere—on the sign (example: Smith and Young, attorneys at law). That may imply that there is a partnership that does not exist. I recently visited a law office that shares office space and they actually had two separate receptionists, as well. 

The integrity of the person you share office space with is also very important. Knowing you can trust the other tenant will help avoid being locked out of your office if the other person has adverse dealings with the IRS (O’Roark). You don’t want to share office space with someone is participating in under-handed business dealings, regardless of what their business is. You may want to get some character references before signing an agreement to share office space, including people that the person has worked with before, so you don’t end up with someone that you don’t get along with or that inserts him or herself into your business or talk so much you can’t get your work done.

Conflict of interest is a very important consideration.

“The requirements of D.C. Rule 1.7, dealing with general conflicts of

interest, and the other conflict of interest rules are imputed to other

lawyers “associated with a firm” under D.C. Rule 1.10. Comment [1]

to Rule 1.10 provides that “[T]wo practitioners who share office 

space and occasionally consult or assist each other ordinarily 

would not be regarded as constituting a firm. However, if they 

present themselves tothe public in a way suggesting that they are a

firm or conduct themselves as a firm, they should be regarded as a 

firm for purposesof the Rules.” (DC Bar Opinion 303)  (Also see 

ABA Rules of Professional Conduct 1.7 and 1.10).

A good review of your own state laws will give you guidance for this important issue. If, in fact, your rules are the same as the ABA Rules, then you need to treat conflict of interest the same as if you and those you share office space with as though you were a partnership. That would involve sharing the information of who your clients are with others in the office space. That leads to other issues of confidentiality.

Confidentiality issues are the same as in a law firm, except the “need to know” is much more limited. If you consult with another attorney sharing office space, you need to be extra careful about any identifying information. Sharing a receptionist is commonly accepted, but sharing of any other staff is discouraged. (O’Roark). If you share an area where filing cabinets are kept, they need to be locked to avoid the potential of a breach of confidentiality. Sharing a copy machine requires diligence to avoid documents or other identifying information being left in the open. (Opinion 303). Another consideration is the buffer in a copy machine that can hold thousands of documents. Clearing the buffer on occasion is a great idea to avoid confidential information being in a location unauthorized people may have access to it. All of these issues exist in any law office, but must be more carefully considered in sharing office space with unaffiliated attorneys or other businesses. 

Instructing shared office staff about the extreme need of confidentiality is vital. Make sure they understand the ethical and legal implications if that confidentiality is breached. A good idea would be to have them sign a confidentiality agreement. Confidentiality would be good to include in your office sharing agreement, as well, because others in the office who are likely to see clients as they come and go. If the client happens to be recognized by someone in the office, it is important for them to know they can’t share that information.

The only financial connection between the entities can be those things set up for shared office space. That may include the office rent, a receptionist, phone service, office equipment such as a copy machine, and break room expenses. Any and all other financial considerations need to be completely separated.  

Sharing office space is a great solution for attorneys. Conflict of interest, confidentiality and complete, visual, financial, and functionality separation of businesses are vital issues to set up and monitor frequently. If those things are diligently handled, it will be a cost-effective, rewarding experience for all involved.

Resources:

Del O’Roark, Sharing Offices: The Ethical, Risk Management, and Practical Considerations,

http://www.poppelawfirm.com/library/Sharing%20Offices-The%20Ethical%20Risk%20Management%20and%20Practical%20Considerations.pdf

William I. Weston, Ethics Concerns In Shared Office Space, Volume 20, Number 5 July/August 2003 http://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/weston.html

DC Bar, Opinion 303, http://www.dcbar.org/for_lawyers/ethics/legal_ethics/opinions/opinion303.cfm

Utah Bar Journal, Practice Pointers: Ethical Considerations for Office Sharing, by Kate A. Toomey, January 20, 2006. http://webster.utahbar.org/barjournal/2006/01/practice_pointer_ethical_consi.html

Utah Ethics Op. 86 (1988)

Unethical Influence in Law; Attorneys Friending Judges

In all jurisdictions of law, is it unethical for a lawyer to view engage conduct that may have special influences over a judicial official? Many conduct this as a form of bribery attempt to influence the outcome of the case. Officials may be influence many ways; more directly, through social interaction, churches and clubs some do not understand that these can serve as a common unethical behavior in a law office.

            In addition, there are several methods of influencing public officials by formally trying to befriend them in order to sway the official in their favor. These may include regular meetings, gifts, casual parties, and dinner with families. These types of pressures may come from what is called lobbyist which propose an opposition through a group or adversaries by expressing their opinion in a political argument.

With all these opportunities, would it sway a Judge’s opinion in favor of the legalist positions for their acquaintances? A graduate student, by the name of Barb Dybwad, from Smith College, recognizes the conclusions or problems of Judge and attorneys befriending one another. As the article presents, Florida has banned the friending “between Judges and lawyers on social media sites although they are allowed to “follow, or fan” them via Twitter or Facebook. (Dybwad, 2009)

In the world of what is ethical and what is not it, has always been illegal to bribe someone in accepting money for beneficial favors. Overall it poses a question of whether small tokens of appreciation may constitute as a bribe, although there are specific rules for someone trying to gain favors in social events and which are commonly referred to as lobbyist. Someone may, through the arts of persuasion, gain votes for legislation that may benefit a lobbyist employer.

At this point, there is no solution on how to handling social media interactions and won’t be anytime soon.

However, I personally think there is a reasonable solution although some may argue; we are all adults and demonstrate appropriate levels of competence. Judge(s) and attorney(s) are both offices of the court and base their understandings on work experience as well education. Commonly, a judge and an attorney may have social interactions as well discuss something about their personal lives, but would these affect things in the court room? Couldn’t we put in request to change venue or judge, generally not unless a judge must recuse or is unqualified of their legal duties? While these circumstances would be unethical, gifts and friending are unacceptable they are a delegation or meeting on behalf of another and become an everyday concern and are being constantly regulated to prevent benefits from being exchanged.

Dybwad, B. (2009, December 10th). Florida to Judges: Don’t Facebook Friend Lawyers. Retrieved May 28th, 2012, from Mashable Tech: http://mashable.com/2009/12/10/florida-bans-lawyer-friends/