From the Chair...

Standing Committee on Lawyer Referral and Information Service

Time for an audit?

We all know that we have panel members out there who owe us fees for closed files or matters that were completed in the past. Now, they may have simply forgotten that it was an LRS case, they might believe it came from another source, they may have changed offices and left the file at their old office, or they might not have bothered to send in the proper fee. In all of these cases, we often need to remind them that we still have the case open in our files and that they need to close it out and send us whatever fee might be due.

In the spring of 2012 the Cincinnati Bar Association's LRS decided to conduct an audit of past cases that we showed as open on our books. We had not completed an audit since 2006 and we were long overdue. Based upon our current tight staffing in LRS, we determined to bring in an outside person to do most of the review and comb through court records. Our Lawyer Referral Director, Jamie Shiverdecker, was aware of a program through the University of Cincinnati entitled the "University of Cincinnati Federal Work–Study Program." Through this program we were able to hire a very bright and motivated graduate student for $10 an hour, with the federal government paying 75% of the cost. She began work in June of 2012, finishing in December of 2012. During this period of time she spent about 350 hours on the audit, with that total including the time we spent to train her on our software and on how to search court records. We estimate that our other staff members spent close to 100 total hours on matters relating to this audit.

In doing a cost/benefit analysis of this effort we looked at our total employee expense and the total fees produced. We brought in $28,993 to date in additional fees. We are still chasing after three panel members on cases, although these do not seem to be cases where large fees will be generated. In addition, we have referred several cases to a collection attorney and expect to file suit in one or two of these matters. The fact that my board authorized filing suit against LRS panel members surprised me a great deal, but their thinking is that if we require our other panel members to remit fees then we should not let others simply ignore us and not pay. Since we do not know the total fees we might be seeking from these attorneys, the suits will have to be in the form of declaratory judgment actions seeking an accounting from each attorney in addition to other relief. I am sure we will encounter some difficulties with these suits, but we are committed to going forward with them.

Lessons learned in all of this? First, we realized that some of our past paperwork in signing up attorneys for the LRS was incomplete. Some of our older forms were not clear, making it more difficult to use those as the basis for a lawsuit. Second, we knew we would make some of our panel members angry, and we did — particularly when we were asking them about referrals from many years ago. However, we had fewer upset panel members than we had anticipated, and I think our staff handled them well. Third, the audit has affected some of the panel member renewals this year. I believe that some did not renew because they were upset that we were questioning them, or perhaps because they realized that we were going to be more diligent following up with them in the future. On the plus side, if they all realize that we will be more diligent in following up on the referrals we may not have to chase after as many attorneys in the future. Finally, we knew before our audit that we needed to review our old files much more often than we were doing — knowledge which was reinforced when we actually did the audit. We have instituted a new review system that we hope will obviate the need for future full–panel audits like this.

I recommend doing periodic audits — not only for the dollars produced, but also because they remind your panel members who do remit regularly that you are requiring this from all of their colleagues. We need to treat our panel members equally and this helps accomplish that goal too.