Relationship Management

Conflicts: Look Forward, Not Just Backwards

If you don't do some predictions, and some gambling, you may miss out on business development opportunities.

By Reed Irvin

THE PROSPECTIVE client you have been salivating after has finally decided to give you an important piece of his business. You have done everything right throughout the courtship. Endless lunches, never-ending rounds of golf. You have spent more time with him than your family. You send all of the relevant information about your new trophy client to the firm's conflict avoidance department and go home early for once.

When you arrive the next day you notice there is an e-mail from the conflicts department. Must be a congratulatory note. When you read it, you can't believe it. Your conflicts department informs you that while there is no existing conflict, the would-be client has been vetoed because to accept his business would mean that the firm would be forced to reject business from several other, ultimately more important, potential clients. Bad move on the part of the firm? Not at all. Even though it's disappointing, it may well be in the firm's best interest, long term to gamble that a future client can be signed up.

In other words: It's time for law firms to rethink how they conduct conflicts checking -- looking not just at existing and past clients, but the ramifications of hiring new clients on board. Do you really want to take on that slip-and-fall plaintiff who wants to sue Microsoft Corp. when you are a major law firm in Seattle? Is it in your interests to sign up the president of The Widget Co. to do her will, when The Widget Co.'s chief rival owns most of the property in your town, and your primary practice area is real estate lawyer?

How do you make those decisions? Obviously, you are not going to hire a psychic to add to your conflicts committee. But you can use your existing software tools to help. Specifically, you should run not just your traditional conflicts checking software, but you should also screen with your relationship management software. Consider not just your old clients and current roster, but those folks you are actively courting. Who would be ruled out as a future client if you say yes today to the pending candidate? Firms may have to gamble a bit; and turn down the bird-in-the-hand if the bird-in-the-tree would be a much better long-term client.

Tedious Process

We have already come quite a long way. It wasn't so long ago that conflict checking was a tedious, manual process. Searching through card files. Circulating memos. Asking around the table at the partners meeting. It was slow and often, not very accurate. Today, those tasks are routinely handled by sophisticated database analysis.

When computers were first introduced into the legal community, the first process to become automated was time and billing. This made perfect sense. Capturing billable time and invoicing accurately is crucial. For most firms, old billing processes gave way to computerized databases that can maintain a history of clients, matters and related parties. It was natural that a conflict search could be automated as well.

After all, the billing information contained the most complete detail on clients. This database could be searched against potential clients and their related parties to determine if a conflict exists.

Obviously, you are not going to add a psychic to your conflicts committee. -Reed Irvin

Now, you can buy specialized conflict avoidance software, with features that include lateral hire information; identifying the role and relationship of parties; flexible and easily interpretable reports; ethical wall restrictions; results history; and powerful searching tools. This sounds comprehensive, but is it?

While conflicts avoidance software is a major advance for many firms, it only protects part of the picture. Don't misunderstand, these results are very important. But if you don't look forward, as well as backwards, you may paint yourself in the proverbial corner, and miss out on new business that would help your firm grow and develop.

After all, business development is coming out of the closet. No longer is the attitude, "If we build it (a good firm), they will come (they being clients)." Rainmaking no longer is an unspoken goal, couched in euphemisms. Now firms have aggressive marketing departments, and those departments use sophisticated relationship management software packages.

Firms send holiday cards, invitations to seminars and events, newsletters and brochures not just to existing and past clients, but to individuals and corporations they would love to attract to the firm. Just like a sales organization, law firms can increase the value of their attorneys' existing contacts by leveraging and managing those relationships.

Creating synergy within a law firm's existing databases adds value, protects the firm and assures future growth. It also maximizes the firm's investment in these systems by making the best use of technology.

The integration of contact management software and conflict avoidance systems is a natural combination. As you evaluate software options, look for software companies that are already partnering to achieve these results.

Reed Irvin is chief operating officer at Accutrac Software Inc., based in Los Angeles.