Conflict Assessment Process - Best Practices

Scope and Purpose

The purpose of the conflict assessment process is to ensure that a firm's commitment to a client's matter, is not compromised, impacted or distracted by other commitments to any other persons. Failure to perform effective and timely conflict checks as part of this process not only erodes this purpose, but limits the effectiveness of the firm's risk management endeavours possibly leading to unwanted business outcomes such as the need for post-acceptance conflict waivers, explanations for non-detection, the need for affected matters to be referred-out at a loss as well as fending-off disqualification motions or responding to disciplinary proceedings.
As an integral component of the firm's risk management strategy, the scope of the conflict assessment process includes multiple measures earmarked to protect the lawyer, his or her practice, and ultimately the firm. These measures are designed to eliminate redundant data entry, limit unexpected timing-based potential conflicts, simplify the person-selection process, facilitate readership of potential conflict results, streamline conflict clearance decision-making and mitigate the risk of phantom matters.

Conflict Assessment Highlights

Conflict assessment activities are integrated within the file-intake process in order to trigger gains in effectiveness throughout the process. For data-stewards – those responsible for data entry – this means limiting redundancy in their work and for decision makers - those responsible for clearing or rejecting new matters from/due to conflict – this means working with most relevant current information. Within this context, decision makers depend the data-steward's accurate execution of firm policies and procedures when capturing person information for the new potential matter created with status "temporary" in order to:

Prioritize new-matter conflict clearance requirements,
Leverage prior findings or comments;
Deal with identified conflicts, or;
Clear matters from potential-conflict.

Temporary Matters and the File Intake Process
The alignment of the scope and purpose of the conflict assessment process with best practices starts with the premise that the "capture" of new client-matter information should be completed by the data-steward in context of the creation of the a new "temporary" matter.
If the new persons associated to the potential new engagement are only searched and not captured in context of a new temporary matter, the process is compromised. The absence of a temporary matter will result in the unwanted repetition of data-entry, non-visibility of potential new work undergoing conflict-clearance potentially triggering a subsequent conflicts once the matter is created, as well as result in information overload as the focus on pre-existing relationships, their absence thereof and/or the elimination of other parties bearing the same name – functionality inherent in the creation of a temporary matter - is not triggered.

New Person Creation vs Selection
As new persons are created or existing persons selected during file-intake, they are associated to the new client and/or matter being created with a defined relationship. When the new engagement involves selected persons also having pre-existing relationships with other persons in the database, these relationships provide critical information to decision makers.
In practical terms, this means that the decision maker must be able to rely on the data-steward's competency in knowing when to select a person versus creating a new one without creating duplicates, as this decision impacts the outcome of the potential conflict results used by the decision maker when clearing or rejecting a matter from/due to conflict. In other words, accuracy in this context ensures that the potential conflict list includes new persons created (therefore having no pre-existing relationships) or existing persons selected along with pre-existing relationships, in order for decision makers to take action in an effective and timely manner.

Use of the Search Tool
Supporting-members responsible for securing new file information within Acumin use the search tool to find and select or to create as new; client and matter relevant-parties along with their relationships during the file intake process. This critical step earmarked to avoid creating duplicate persons when the person already exists involves the following key action items:

The application of relevant search criteria and the use of pertinent search tools during the execution of the search function for an accurate outcome;

A clear and unwavering understanding of the unwanted impact on the potential conflict results when the user creates duplicate persons instead of creating a new relationship with an existing person;

The selection and classification of the right person reflecting fairly the person's relationship to the new client and/or matter with a view that the decision maker will need to understand these pre-existing relationships presented on the potential conflict list without having to review long lists to confirm that the right person was selected;

The consistent mandatory capture and maintenance of unique information including former names in order to facilitate the user's ability to differentiate amongst persons having the same name;

The elimination of persons found with the same name that are not the same person during the search process, in which case the data-steward would be right to create a new person;

An understanding of the implications on the potential conflict assessment process when new data-entry in context of the potential new matter is deferred and not immediately captured after it is searched.

Best Practices

1. Use of Temporary Matters

Although the search-tool is available for multiple use-cases, to remain consistent with the scope and purpose of an effective conflict assessment process, it is considered best practice to trigger the search-tool in context of Acumin's integrated conflict assessment and new filter-intake process. This progression captures conflict-relevant data from initial search onwards within a temporary matter; providing the best possible information-outcomes for the decision makers in order to proceed with confidence when clearing or conflict or rejecting a matter from/due to conflict.

Benefits

It eliminates redundant data entry. If there are 10 parties to be searched for a matter being considered, where the temporary matter is not created as part of the process, the same 10 parties will need to be re-entered and re-searched with the same level of competency as when originally processes. The process to search, select or create as new once, in order to save the results within the temporary matter while it undergoes the conflict clearance process ending with activation or rejection, is the most efficient way to capture person information.
It limits unexpected timing-based potential conflicts. If the parties searched are not saved in context of a new temporary matter, left undocumented and unrelated to the potential new work and/or as non-existent persons within database, will limit the required visibility of potential new work and possibly compromise the conflict assessment process. With the fluidity found within most law-firm clients, the unavailability of information on new matters under consideration and their related person-relationships, affects the effectiveness and timeliness of potential conflict-related decisions by others. The ability to create temporary matters provides decision makers with the needed matter profiles in order to;
- Mitigate the risk of unexpected timing-based potential conflicts;
- Limit resulting unwanted business outcomes including the need for post-acceptance conflict waivers and/or explanations for non-detection and the need for affected matters to be referred-out at a loss;
- Facilitate the prioritization for clearing or rejecting a matter when both parties involving the same action reach out.
It focuses on relationships or their absence thereof. When the parties involved are searched, it is not the person-hit on its own that is relevant to the decision maker, as much as the persons' relationships to others found in the database. If each person is searched and when found, selected and categorised in context of the new potential matter, or confirmed as new – a process inherent in the creation of a new temporary matter - the decision maker will have access to pre-existing relationships or their absence thereof, critical information when making the decision to clear a new matter from conflict. In the absence of a new temporary matter, the decision-maker is required to read through lists of hits for the persons searched without context nor the benefit of elimination of non-relevant persons bearing the same name.
It facilitates readership of potential conflict results. As part of the new matter creation process, the data steward searches the relevant parties, inherently eliminating irrelevant hits on similar names through the selection of the one right person, or where warranted the creation of a new one. The result of this process is a succinct list of relevant persons involved in the new temporary matter, and their relationships or the absence thereof to others within the database. It excludes unrelated hits eliminated as part of the process reducing the volume of data and making it easier for the decision maker to read and analyse relevant results with context.
It streamlines conflict clearance decision-making. The list of relevant persons and their relationships to others in the database or its absence thereof, facilitates the ability for the decision maker to conclude on potential conflict considerations. The information offered at the end of this process is paired down to significantly streamline conflict clearance or rejection decision making – a critical element to timely and effective new matter creation procedures within law-firm clients.
It allows for additional collateral benefits. The creation of new temporary matters as part of the potential conflict assessment process provides an important audit trail when the matter is rejected. In this case, not only can the user document the reasons for rejection for future reference and consideration, but also allow for further risk management opportunities including the retention of matter-reference notes, the capture of non-cash disbursements and/or time investments subject to firm policy, the ability for the data-steward to trigger a non-engagement letter in order to reduce the risk for phantom matters as well as incorporate other firm policy requirements which may be part of a concrete disengagement process.

2. Capturing the Right Persons in the Database

a) Relevant Persons – Who and How

As the firm has obligations to former clients as well as current ones, it is considered best practice to capture and retain as much person information as possible along with their relationships so the latter can be effectively leveraged as potential conflicts are being considered. Without the association and categorization of created persons, the captured information will present as a voluminous list of data records without context. In practice this means that search-tool and potential conflict results will not provide the person associations and perspective needed for users to make eliminations and render a conflict clearance decision without taking additional effort.
As a result, an effective conflict assessment process starts with the capture of the information it relies on, namely;

Persons related to the client (if new);
Persons involved in the potential new matter.

Within this context, organizations that use the referral source field to accurately record the source of business as well as the member properties to capture an accurate member structure, can use the potential conflict assessment process in consideration of potential conflicts of a legal as well as those of a business and human-resource nature.

b) Persons directly associated to the client and the matter

Each person – individual or legal person – directly associated to an action, should be associated to the temporary matter during its creation as;

The client,
The client's contacts;
The matter's parties represented
The matter's third parties, and;
The matter's other parties.

It is considered best practice to also associate to the new client or matter other relevant client or matter related parties beyond those considered to be parties represented, third parties or other parties. This includes:

Employer or key-employee information for clients or parties represented, especially if the firm has an employment law practice;
Legal counsel for other parties (possibility to be identified as such in version 2.0);
Referral source for new clients and new potential matters. This practice will mitigate the potential for business conflicts in the case where the referral source is not also a client or party represented;
Family members for clients or parties represented - spouse, parents and children, especially for family law matters;
Executors, trustees or beneficiaries for wills and estates matters;
Expert witnesses for litigation files;
Other client or matter relevant persons and their relationships.
visible for non-individual person: Person, Client and Vendor properties;

It is considered best practice to include relevant parties for the members of the firm - current and former – within member properties. The association of family members to each current and former member of the firm, mitigates the potential for the firm to unknowingly take a matter which may negatively impact a member's family.

3. Select, Create or Use of Text Fields

To maintain data integrity, reduce redundant data entry and be able to rely on accurate potential conflict assessment reports; a person must be entered in the database only once. Before creating a new person, the latter must be thoroughly searched and if found eliminated as not being the same person.

When a search or search results are bypassed or ignored, the risk for duplicate persons is greatly increased. With person duplication the decision-makers responsible for conflict clearance risk missing absent but existing relationships to other persons in the database as missed relationships cannot be reflected on the potential conflict assessment results report. This forces the decision maker to have to re-assess person search results and potentially review unnecessary and lengthy lists of names that should have been considered in the elimination or selection process by the data-steward.

a) Selection of the person found or creation of a new person

When the person to be added to the new client or matter is found within the database, the person must be selected and not created as new. This distinction is critical for those participating in the conflict assessment process. It ensures that the conflict clearance decision is made in context of the person's relationship to the new client and/or matter and the person's pre-existing relationships to other persons or lack thereof, as well as provides the necessary associations for the potential conflict results report to have accurate and reliable content visible to the decision maker.

Points to Consider:

Perceived efficiencies are lost when by-passing searches in a favour of creating the person as new or entering the person's name in a text field. This type of process not only creates tremendous inefficiencies for those responsible for conflict clearance decisions but also significantly increases the risk for missed potential conflicts.
Creating a new person when the same person already exists generates a duplicate record of the same person in the database. This action results in the presentation of misleading information - it presents the same person as a different one with the same name but without pre-existing relationships. The new person shows with "no potential conflict" eroding the decision maker's confidence in the process when he or she knows this absence of relationships to be untrue.

b) Adding names of persons to Text field

The addition of person names in a client or matter searchable text field does not create a person record at all. This action compromises the conflict clearance process and cripples potential conflict results as any hits during the search process are unselect-able as persons required to present the relationships and therefore excluded from the list of persons associated to the new client or matter within the potential conflict results list.
The absence of a known person from the list of persons associated to the new client or matter forces the decision maker to read through the individual list of hits per person searched to identify the text content worth drilling to in order to achieve context. This is not only highly inefficient but it significantly increases the risk for a decision maker to incorrectly clear the matter from conflict.

c) Efficiency and risk conclusion

Any perceived efficiency gain resulting from the above actions is lost when the information provided to the decision maker is unreliable, often resulting in the recipient's undertaking of undocumented and ineffective steps to mitigate the gap, a lack of confidence in the information he or she receives and an inherent increased risk for the firm.

3. Maintenance of an Up-to-Date Database

Without prioritizing the maintenance of an up-to-date database, the conflict assessment process is crippled, with potential misleading implications.

a) Leverage the client matter status

The combined status of the client-matter should be fairly reflected in order for the persons participating in the conflict assessment process to have visibility within search results (data-steward) as well as potential conflicts results (conflict assessment decision-maker) in order to be able to confidently leverage this information during the conflict assessment process.
Organizations that use consistently meaningful status options benefit from concretely defined client-matter status alternatives helping decision makers assess the quality of potential new matters beyond in order to firm-up acceptance traditional conflict clearance.
For example the use of the "Rejected" at the client level when a client exhausts firm credit, helps to identify clients that are considered a bad credit risk should they re-appear at a later date in context of a new engagement, whereas the use of the status "Collections" also at the client level implies there are credit considerations that may lead to the request for retainer in trust.

b) Names, abbreviations and nick names

The existence of documented requirements for populating "name", "abbreviations" and "nick-names" ensures data-entry consistency for all members involved in the data-entry process, ensuring data-accuracy of field content. For example, the use of the name field for the full name such as "Canada Revenue Agency" instead of the abbreviation "CRA" would ensure a consistent outcome when the information is searched. It is considered best practice that the name field in the non-individual profile be used for the full name of the organization with the abbreviation added at the start of the sort order name. Similarly in the case of individuals, it considered best practice that nick names be committed to the nick name field and first, middle and last names be completed in full.

c) Impact of the evolution of a matter

Although it is considered best practice to capture all the information for all relevant persons involved in the matter during the initial file-intake and conflict assessment process, as matters evolve, additional parties are joined or dismissed, expert witnesses are hired and principals leave their companies. As a result, new parties and expert witnesses should be added to the affected client-matter structure – a process that triggers assessment and clearance from conflict of the specific person; dismissed parties should be re-categorised as "Dismissed" instead of being disassociated from the matter; and employment information for parties affected should be updated as soon as the change is made.

4. Search Tool Options

The search tool includes options that assist the data-steward to search-eliminate, search-select or search-create with greater efficiency without by-passing important data-management controls.

a) Summarized results for selected contact categories

It is considered best practice to identify commonly used contact categories that do not provide additional value in context of the conflict assessment process – for example Billing Contact – as "specified" contacts within system settings. Contact categories identified in this manner facilitate the presentation of contacts bearing the identified category only once for the affected client. In other words, the use of the "Specified" status provides users with the ability to "summarize multiple incidences of specified contacts within the same client into one result per client". In this case, if the same contact is set as the billing contact for all matters of a major client, then each time that name is searched and found the latter will list the client with the text "affecting multiple matters" to identify the hit. The search tool offers users the alternative to see the results as one row per matter.

b) Known relationships

In order to reduce the level of unnecessary relationships it is considered best practice to identify persons as having known relationships so that they can be excluded from the conflict assessment process. This option, found within person properties is used to identify persons with relationships that are known not to result in potential conflicts within an organization. The supporting search-tool option to "Exclude relationships for persons with known relationships" eliminates visibility of relationships for persons identified in this manner, limiting potential redundant information from listing on affected output sources.
For example an insurance adjuster included on 400 matters for an insurance client, would typically have a non-specified contact category which would not be typically summarized therefore showing 400 relationships with little or no value to the conflict assessment process. Once the person is identified as having known relationships, the 400 relationships can be excluded from the search results facilitating the process. If and when needed the search tool offers the user the ability to see all 400 relationships.

c) Search result - presentation of person coordinates

With the critical requirement to select or eliminate persons found, it is considered best practice to secure person coordinate-information considered to be unique – for example mobile phone or email address. The manner in which these coordinates are identified in the database should be consistent and in support of the person coordinates that are listed within search results. For example if the firm decides to require the capture of a mobile phone and email address for individuals, then data-entry personnel need to capture this information identify using the coordinate type that will show on the search tool results.

5. Separation of conflict clearance from matter activation

It is considered best practice for law-firm clients to separate conflict clearance from matter activation in order to incorporate business-relevant conditions for activation once the matter has cleared conflict. The separation of the conflict clearance process from the decision to activate the matter is intended to reinforce the organization's workflow beyond conflict assessment. It allows those responsible for clearing the matter from conflict to make their decision based on potential conflict results content, in order to hand-off the temporary matters to those responsible for completing the file intake or rejection process. Matters cleared from conflict can be activated in context of meeting administrative and credit conditions, whereas matters that are not cleared from conflict, can be rejected subject to completed non-engagement requirements.

6. Client Identification and Verification Process

The implementation of a "Know your Client" process within the file intake workflow is considered best practice. The workflow starts with the law-firm client obtaining the name, address and telephone number of the affected person and concludes with confirmation of adherence to firm policy in context of relevant client identification and verification rules governing the law-firm client. The identification process provides information needed for conflict clearance, and if retained within the matter rejected due to conflict, it can be further leveraged should the same client resurface in context of a new matter. The verification process in this case is best deferred until the signed engagement letter is received (best practice as it may also include the first set of transferred funds).

7. Pre-cleared parties-represented or other-party templates

To further facilitate the decision maker's ability to focus on information that needs attention while limiting the search-eliminate or search-select requirements for the data-steward, it is considered best practice to include within the file intake process, use of parties-represented or other party templates. These templates include groups of parties-represented or other-party persons pre-cleared from conflict which can be added to their respective sections during the file-intake process.

8. Implementation of Engagement/Disengagement Letters

It is considered best practice to use engagement, non-engagement or disengagement letters within the conflict assessment and file-intake process in order to best support the life-cycle of the potential matter, by providing transparency to the client as well as yielding a better docket to collected cycle while limiting unwanted outcomes for the firm.

Matter Properties: Engagement letter process to support the pricing model and retainer in trust requests as well as the process to confirm non-engagement or disengagement.

Business Process Rules: Email follow-up and eventual client status change to mitigate exposure when sign off by the client on engagement terms was not obtained. Typically this BPR rule is not used in context of confirmation of non-engagement or disengagement as once the letter is sent, it is identified as confirmed.

9. Decision Maker Access

In order to further mitigate the risk for missed potential conflicts, it is considered best practice for law-firm clients to support conflict assessment practices by leveraging the conflict-email process and by providing decision-makers with access to the potential conflict results form.

10. System Setting Options

For a best practice result, the position of system setting options offered should be considered in context of the overall file intake and conflict assessment process, its level of centralization or decentralization and the level of system or report access provided to the participating users.

Best Practices – Summary

The conflict assessment process is an essential component of the firm's risk management strategy. It ensures that a firm's commitment to a client's matter, is not compromised, impacted or distracted by other commitments to any other persons. The steps involved in the process are designed to eliminate redundant data entry, limit unexpected timing-based potential conflicts, simplify the person-selection process, facilitate readership of potential conflict results, streamline conflict clearance decision-making and mitigate the risk of phantom matters.
The search progression for persons' associated to the potential new client and/or matter is an integral part of both the potential conflict assessment procedure as well as the new file intake and creation process. This requires that the data-steward search for the persons to be associated with the new file, in order to find-select, find- eliminate and/or not-find & create them. The search progression inherently affects database relationships or their absence thereof, impacting the presentation of associated persons within the potential conflict results report or form, facilitating the intended use-case for decision makers responsible to clear the new matter from conflict.

Supporting functionality

Client Properties – Contacts (Parties Represented); referral source; employment information, known relationships;
Matter Properties – Parties represented; other parties; referral source; association between other party and their legal representation
Person Properties - Contacts (Parties Represented); referral source; employment information, known relationships;
Member Properties - Contacts (Parties Represented);
Parties-Represented and Other Parties Templates – Captures groups of persons pre-cleared from conflict available on creation of new client-matters.
Search Tool – Quick person search, use of known relationships exclusion and summarized results by specified contact categories per client structure, use of identifiers on search results
Potential Conflict Results – Form and Reports identifying the potential conflicts after the elimination of non-relevant person bearing the same name
"Temporary" Matters – captures all relevant persons for the client and matter, sets a placeholder for the potential matter, and keeps the history (rejection due to conflict and non-recoverable investments).
Client – Matter Status Options – Use of combined status to provide relevant information to the file intake and conflict clearance process

Conflict Email – Use of conflict email to further support the conflict clearance process
System Setting Options – File intake and conflict assessment options earmarked to facilitate both processes
Engagement Letters – for use for confirming engagement, non-engagement or disengagement
Organization-Defined Relationships (categories)