Legal practitioners face multiple challenges and competing (over and above the sometimes conflicting) interests on a daily basis. If not appropriately managed, the process of balancing the various challenges and interests can have a negative impact on legal practitioners (professionally and personally), their practices and the various stakeholders in the firm. The results could vary depending on the nature of the challenges faced by the legal practitioner and may lead to professional indemnity (PI) claims being brought against the firm or even action by the Legal Practice Council (the LPC) as the regulator of the profession.
There are many legal practitioners who, unfortunately, are not aware of the various support services available to them and thus have no information on who to turn to for assistance and guidance. The challenges are sometimes compounded by the fact that legal practitioners – especially sole practitioners and those practising in remote parts of the country – work independently and thus in silos with no or minimal access to information on the available support services. There may also be an assumption that appropriate support is only available at a huge financial cost to the practice.
Identifying the need for support
In assessing the information provided when practitioners notify the Legal Practitioners’ Indemnity Insurance Fund NPC (the LPIIF) of PI claims brought against them, it can be noted that, in a number of instances, the claim could have been avoided if the legal practitioner and the staff in the firm had timeously made use of the support services made available to the profession. With the benefit of hindsight and an analysis of the detail gleaned in the assessment of the underlying causes of claims, we note that the risks associated with the challenges of legal practice are best faced when identified at an early stage and appropriate measures developed and implemented well before the risk materialises. In so doing, a proactive risk management approach is adopted. The proactive management of risk is part of the core elements of running a legal practice.
From time to time legal practitioners may be faced by challenges for which they do not have the required tools and/or information to appropriately deal with. The challenges facing legal practitioners are, in certain instances, compounded by the competitive and often antagonistic nature of the profession. The rapidly changing environment in which legal practice is conducted also brings new risks and challenges, including new regulatory requirements with which legal practitioners must comply. There are instances where a legal practitioner may have identified the need to reach out for appropriate help, but was either unaware of the support services available or was of the view at the time that seeking assistance or guidance would amount to a concession of failure, send an early warning to the regulator that not all is going well in the practice or that the relevant support is unaffordable to the firm. This, however, like the proverbial ostrich burying its head in the sand, is not a prudent approach to take. Challenges (and their consequences) cannot be wished away. When the warning signs of potential risk emerge, it is best to seek assistance rather than hope that the challenges identified (or the emerging early warning signs) will simply go away. Similarly, hoping to ‘ride out the storm’ may only exacerbate the challenges and increase the impact of the risks in the event that they materialise. The whirlpool effect must also be avoided. What the practitioner is dealing with may, in some instances, be a symptom of a greater underlying problem.
Seeking appropriate support
In dealing with PI claims brought against legal practitioners, we at the LPIIF have also noted that many practitioners are not aware of the various support services made available to the profession. These legal practitioners thus do not know where to look for help in the event that they find themselves in a position requiring assistance. Seeking appropriate assistance at an early stage will mitigate the likelihood and the impact (in the event that a risk materialises) of many of the risks faced by practitioners if appropriate corrective action is taken.
PI insurers in other jurisdictions have informed us that one of their important learnings has been that, in many instances, practitioners require a support service, which is able to consider their challenges and, where necessary and appropriate, provide guidance on possible appropriate action to be taken by the legal practitioner. The early intervention of the support service reduces the likelihood and the impact of the risk of claims and/or regulatory action against the firm. In some instances, legal practitioners may even have thoughts of giving up practice (or even abandoning their practices) when they think that there is no assistance and support available to them.
The lessons learned in other jurisdictions is that, in appropriate cases, the legal practitioner/s concerned may well be advised to consider taking actions such as closing their practice, merging with another firm or even downscaling the firm in terms of size and/or areas of operation. These are difficult but necessary considerations. Support services should not, however, be seen as a step leading to a negative outcome engaging the available support services may assist in giving guidance which, if correctly applied, could not only mitigate the risks in the practice but also provide the practitioner with the necessary tools to be used in growing the firm in a healthy and sustainable manner.
What support services are available?
It is against this background that the LPIIF established the practitioner support function. Henri van Rooyen has been appointed as the Practitioner Support Executive at the LPIIF and took up his position on 1 February. Mr van Rooyen has vast knowledge and experience in dealing with the challenges facing legal practitioners, having practiced for over 30 years and also having served on various structures in the profession, including the Council of the then Free State Law Society, the Board of Control of the Attorneys Fidelity Fund (now called, the Legal Practitioners’ Fidelity Fund (the Fidelity Fund)), the Council of the Law Society of South Africa (LSSA) and also as a non-executive director of the LPIIF. Mr van Rooyen thus brings a wealth of all-round experience gained from the position of a practitioner, the regulator, the Fidelity Fund (in respect of misappropriation of trust fund claims), the professional interest group (the LSSA) and the LPIIF (in respect of the PI claims). Mr van Rooyen is a highly experienced and qualified resource made available to legal practitioners at no cost to the firm. He can be contacted at (012) 622 3900 and his e-mail address is henri.vanrooyen@LPIIF.co.za. Legal practitioners are encouraged to consult with Mr van Rooyen in respect of any challenges they may be facing in their practices.
Some legal practitioners have indicated that they had laboured under the mistaken belief that the LPIIF is a part of the regulator and that, as such, reporting matters to the LPIIF or seeking any assistance from the PI insurance company will amount to reporting oneself to the regulator. This belief is not correct. The LPIIF is an independent entity and not part of the regulator.
The Practitioner Support Service provided by the LPIIF must be distinguished from the circumstances under which a curator for the practice is appointed in terms of the Legal Practice Act 28 of 2014 (the LPA); the two are distinct and have separate functions. The curator is appointed to take over certain affairs of the firm after an order is granted by the court in appropriate circumstances. The functions of the curator, as set out in the court order, relate to taking control of and administering the trust account, with any rights, powers and functions in relation thereto as the court may deem fit. On the other hand, the LPIIF provides the Practitioner Support Service as a proactive risk management measure made available to the profession. The Practitioner Support Executive will not take over the running of the practice and/or its trust account. The Practitioner Support Service is also not a business development service but may serve to guide practitioners to the appropriate services made available by other structures in the profession which can assist with business development services.
The Practitioner Support Service is provided by the LPIIF as part of the risk management service provided to firms, also at no cost. Risk management queries can be addressed to me at thomas.harban@LPIIF.co.za or at (012) 622 3928.
The significant changes to the profession brought with the implementation of the LPA, the rules issued in terms of the LPA and the new Code of Conduct (see www.lssa.org.za) have introduced new compliance and governance requirements for legal practitioners. The appropriate management of the trust account environment is an integral part of the proper management and administration of a legal practice and failure to comply with the requirements is a breach of the rules, which may lead to disciplinary action being taken against a legal practitioner and criminal charges being brought against the legal practitioners concerned. The compliance requirements should never be seen as a ‘tick-box exercise’ or simply an added level of bureaucracy imposed on legal practitioners. The compliance and governance requirements applied to legal practitioners seek, among other reasons, to assist legal practitioners in mitigating the risks associated with practice. The risk management unit of the Fidelity Fund is staffed by a number of professionals with extensive experience in managing the risks associated with the trust account environment. Queries related to the appropriate management of the trust account environment can be addressed to Simthandile Myemane, the Practitioner Support Manager at the Fidelity Fund at simthandile.myemane@fidfund.co.za.
The LPIIF team members are also available to conduct risk and practice management training for legal practitioners and their staff at their respective offices. Legal practitioners are encouraged to contact us in order to arrange mutually convenient dates and times for such training sessions.
Conclusion
It is hoped that legal practitioners will make use of these free services and thus mitigate their risks. It must be remembered that no one person has the answer to every challenge posed by legal practice and that in seeking the assistance and guidance from one of the services highlighted above, the legal practitioner has the benefit of an independent third party who brings an objective view to the risks and challenges in the firm.
Thomas Harban BA LLB (Wits) is the General Manager of the Legal Practitioners’ Indemnity Insurance Fund NPC in Centurion.
This article was first published in De Rebus in 2019 (July) DR 6.
