One year ago in these pages, several articles explored various aspects of preparing for disaster. The ABA's Tort and Insurance Practice Section, led by Seattle attorney Randy Aliment, dedicated a year to the subject. Superstorm Sandy drove home the point.
Your firm is your business. Your clients are hard won and, with ever-increasing competition, perhaps even harder to maintain. Your firm most likely owns or leases real property and spent significant dollars on contents, development of intellectual property and attracting its human assets. There's no question that your firm earns revenue from delivery of its widget, otherwise known as legal advice, to its clients.
A law firm is the same, in many respects and particularly when it comes to protecting itself from manmade or natural disasters, as any other business. However, most firms don't take the time or energy to protect their assets the same way as other, more traditional businesses. This leaves firms at risk for loss of clients and revenue.
Accordingly, law firms should use critical protocols to protect their assets (both tangible and intangible) from disasters, in the same manner that other businesses use and rely on such protocols. For instance, board members and executives of publicly traded companies are concerned with, and arguably responsible for, ensuring that protocols and risk management are in place to respond to many different types of business risks.
Obviously, the stakes are high, as the livelihood and survival of these companies are at risk. If little or wrong protection is in place, the value of shares is adversely impacted, which can lead to a number of negative outcomes, including shareholder and other litigation. When you think about it, while law firms in the United States are not traded on the exchanges, there really is no reason why the partners would not want to protect their assets with the same high standard of care. With that in mind, this article will provide a summary of some of the critical protocols to consider.
When we consider the topic of risk, we think in terms of what we refer to as "The Asset Protection Circle." The Circle consists of three parts: pre-loss, disaster response and claim management. Each part of the circle is equally important to the security of your firm's assets. This article will address five protocols in the pre-loss and disaster response sections of the circle.
Five Pre-Loss Protocols
While more than five protocols make up pre-loss asset protection, five are particularly important: 1) identify your goals; 2) identify your critical path; 3) identify your assets; 4) determine your firm's risk profile; and 5) audit whether your risks have been transferred.
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