There are also end-of-the-year insurance issues that come up, too. Some insurance renewals, open enrollment meetings and decisions about flexible spending accounts/health saving accounts (FSA/HSA) are some of the most common ones.
Here are four less obvious — but important — insurance and risk management issues to look out for as you head into your end-of-the-year busy zone.
Professional Liability: End-of-the-year time crunches present unique professional liability risks for your firm. Many lawyers are working extra hard to squeeze in the maximum amount of billable hours in the final months of the year. Overworked and tired lawyers are more likely to make careless mistakes and more prone look for shortcuts in their attempt to get the most done by year’s end. While peer review (even for partner-level work) and extra staff can be helpful, it is critical that the firm management message be one of maximizing the time available, but also keeping to the highest professional standards.
Clients can also sometimes be difficult to work with around the holidays. Despite needing the legal work completed, they can sometimes be hard to reach. Conversely, some clients are working extra hard at year’s end and expect your lawyers to do the same.
Encourage your lawyers to have good contact information and increased communication with their clients during this period. Good communication can smooth many clients’ demands — plus clients rarely complain that their lawyer is communicating too often with them.
Health Insurance/Benefits: Besides the open enrollment and renewal issues that are largely known and planned for in advance, your employees have other end-of-the-year insurance issues that can impact your firm. Many insurance plans and tax-advantaged accounts (FSA, HRA) are calendar-based, meaning that employees are incentivized to use up the benefits or funds during the calendar year. Therefore, it’s common for employees to try to take care of any outstanding nonemergency medical appointments in the last few months of the year. Employee absenteeism during this time can disrupt getting needed work done.
Anticipating this challenge, encourage your employees to plan their time out of the office in advance and to keep on top of their reimbursement balances and yearly benefits. Remind your employees to check their balances and send links to their log-in accounts to avoid the end-of-the-year rush.
Cyber Risk: Bad actors continue to find law firms to be rich targets as they are repositories of personal information and a center of financial transactions. Toward the end of the year, there are increased incidences of phishing, also known as frauds against law firms that target the chief financial officer (CFO). The typical phishing scenario is that the CFO or approver of financial transactions (the legal administrator) will receive an email that appears to be from a law firm leader (the managing partner) requesting funds to be transferred or wired. After the money is transferred, the funds are gone and quickly untraceable.
Although it can be difficult to add layers to the process in the fast-paced transaction world, it is critical that you institute checks and balances to protect your firm. Most firms now have a verbal confirmation before funds are sent, especially via wire. Around holiday time, bad actors know that partners often take vacations and will try to capitalize on this. Therefore, insist on a process that includes verbal confirmation at all times — even during vacations.
Insurance Renewal Timing: If the end of the year is a stressful and super busy time at your firm — and whose is not? — consider moving your insurance renewals away from the year’s end to a time that works better for you. While it can be complicated and cannot always be done on short notice, with the right planning, you can change your renewals to a more relaxed time when you can give the insurance the attention that it deserves.
Consider these insurance challenges in advance so that you can end your year on a high note and set your 2018 on the right course.
About the Authors
Uri Gutfreund is the National Law Firm Practice Leader for Risk Strategies Company, a national top 25 insurance broker. He and his multidisciplinary team advise law firms on all types of insurance and benefits. Gutfreund is a frequent speaker at legal conferences, and a writer and blogger on insurance and risk management.