Suppose next week begins with one of your top paralegals or legal secretaries giving you two weeks’ notice. Maybe they are moving to another location or another local law firm. But now you have an opening to fill.

The first response is not about filling the position. First, you must determine if there are any matters the employee is working on that they no longer should. You must also determine whether some network access rights should be changed.

FIRST THINGS FIRST

If you have been informed the employee is going to work for another law firm, then it is prudent to check and see what matters you have in which that firm is opposing counsel. Hopefully there are not any – or there are only a few old, closed cases. If a departing employee is going to a firm with which you have several contested matters currently underway, it is prudent to have your IT professional restrict that employee’s access to those files and to reassign someone else to do that work, even if it is the lawyer. Some firms take two weeks’ notice as an event which it is simpler to let the employee go immediately and just pay the two weeks’ severance. I am not suggesting that approach. I just know it happens. If you want to retain the employee and your staff rotates who performs receptionist duties, it may make sense to have the employee do more receptionist tasks, which typically involve less sensitive information.

To avoid adding to or causing any negativity, share with the departing staff person that this is the process the firm has adopted, and it is not intended to reflect poorly on them. Rather, it is intended to protect both law firms.

REPLACING DEPARTING EMPLOYEES

You have, no doubt, heard the business maxim, “Fire fast. Hire slow.” No one likes losing a good and trusted employee, but shortcutting the replacement process may ultimately result in having to do it far too often.

That means you must do your homework. Even if you may find it more challenging to hire a replacement in these times, you still must invest the time to hopefully find a great fit for the firm who will stay there for a long time.

So I still support the traditional practice of requiring a cover letter and resume. If they do not have a resume, you may allow them to submit an employment history. Then look for any mistakes.

It might seem harsh to disqualify a recent law school graduate applicant for a typo on their resume or cover letter, but we are discussing staff hiring. Typos, poorly written sentences and other mistakes are significant for those whose job duties would include proofreading and preparing documents and correspondence.

CHECK THE REFERENCES

It is easy to be cynical about references, assuming someone will only provide the names of people who view them positively. But they must list their employment history. If none of their references are from their most recent employment, you will want to make a note to ask about that omission if you schedule an in-person interview. Asking which lawyers they primarily worked with at that firm and what they did for them is a good start.

It is very important to check references, even in this tighter job market. Imagine the worst possible disaster scenario someone new could create. Maybe it is a social media mess, stolen client information, stolen money or maybe an event that makes the local or national news.

Document the date and time you checked their references or previous employer, even if the specifics should not be shared (except perhaps with law enforcement when criminal activity is suspected).

One challenge in checking references or prior employment is that many employers, including law firms, no longer provide much information because of liability concerns. Sometimes all you will receive is employment verification with the start date and end date. Others have suggested you might obtain more information by asking if that former employee would be eligible to be rehired at the firm. A simple “No” response gives you valuable information.

CRIMINAL BACKGROUND CHECKS

Today it is prudent to run a criminal background check for every new hire. There will be some exceptions, but the background check is relatively inexpensive and can be done online.

You can also exercise your own judgement with the results and explain to the potential employee that not every mistake is disqualifying. For example, a DUI arrest reduced to reckless driving 10 years ago may not be a problem. But if the person is still on probation for their third DUI and the job involves driving to courthouses to file documents, the past at least merits further discussion, if not moving on to another candidate. Prior theft or embezzlement charges are most likely disqualifying.

Historically, some law firms do not contact law enforcement when they discover embezzlement, whether it is from embarrassment at being a victim, the time involved in dealing with law enforcement or preconceptions about whether charges would be filed. This is another reason why it is important to check references and pay attention to significant employment gaps in their resume.

State background checks can be done at CHIRP, the Criminal History Information Request Portal.

The website states:

In addition to a subject’s first and last name, requests for criminal history record information must include a date of birth. CHIRP will search three (3) years before and after the date of birth for possible matches. Additional identifiers such as aliases (maiden names, previous married names, nicknames) and social security numbers, if known, can be provided for a more thorough search of the OSBI Computerized Criminal History (CCH) Database.

It might be advisable to create a form for potential employees to sign providing all that information, including prior names. I would also encourage you to observe the candidate when you tell them a criminal background check will be required. One grimace may be worth a thousand words. If they say, “I know what you will find. Let me explain,” then let them do so, and give them some credit for their candor. They might confess something in another state that might not be picked up by the Oklahoma background check. But it is also likely they have a reasonable, non-disqualifying explanation.

EMBEZZLEMENT RISK

Depending on the type of law practice, temptations can be presented to employees. Suppose an employee who normally doesn’t handle money is the only staffer remaining at the end of a long day. A client shows up just before closing with a $300 cash payment. The staffer takes the payment and, because it is the end of the day, does not write the client a cash receipt. The bank deposit has gone for the day, so the employee puts the cash in an envelope and puts it in their desk drawer to be turned over the next day. But they do not know how to enter the payment into the client’s ledger. Then maybe absences or the weekend remove it from the top of the employee’s mind. Three weeks later the employee notices a crumpled envelope in the back of the desk drawer. Even the honest employee will recognize that if someone was going to say something they would have done so by now. They may also note that when they turn the cash in, they may be criticized for not writing a receipt or hanging onto the money too long. Add in other complicating factors like the utility cutoff notice they just received.

This is how many of the six-figure law firm embezzlement by employee cases begin. Once it is seen how an embezzlement could work, they could begin looking for other avenues that are open. An Oklahoma lawyer/CPA told me a story where five employees of a firm had American Express business accounts. The bookkeeper soon figured out that she could pay her personal American Express bill with a law firm check and no one would be the wiser. Soon her AmEx account had a large positive balance, and the bookkeeper began traveling for pleasure more.

Good processes can limit the opportunities for financial mischief. Someone other than the bookkeeper doing the books should review the bank statement or online bank records monthly. All cash payments received must result in a receipt given to the client with carbonless copies made.

For an example of a worst-case scenario, we have the case of Blanca P. Greenstein. The West Palm Beach lawyer did not bother with a background check because her then-husband, who was also the law firm’s CFO, recommended the employee, having worked with her at another firm. Had a background check been run, the firm would have discovered this person was a felon, having been previously convicted of theft. As the headlines later noted, “A Swindle Cost a South Florida Attorney Her Law License, Marriage and $155,000.”

Even though the lawyer borrowed money to replenish all missing funds within 48 hours and no one accused her of a wrong, intentional act, she ended up with an agreed three-year suspension from the practice of law, along with paying $8,261 in costs.

That she was an innocent victim was likely a mitigating factor. But the fact that the bookkeeper wrote personal checks to herself totaling $155,000 over an 18-month period was likely an aggravating factor, as even a cursory examination of trust accounting records would have revealed the scheme.

The law practice management advice is the trust account contains funds from clients and others. The lawyer with the trust account has complete responsibility. A lawyer can delegate certain duties, but you cannot abandon oversight of your trust accounting responsibilities. Many large law firms have their employees who handle money bonded, a process that would also catch felony convictions.

CONCLUSION

One of Greenstein’s friends said Greenstein’s story should serve as a lesson to all attorneys that the bar has an “acute sensitivity” when it comes to trust accounting. Given that the lawyer receives the money in trust to keep it safe, that “sensitivity” is understandable.

But this is not the only lawyer discipline story that started with an inadequate hiring process, which is why I want to stress that good processes are essential for law firm staff hiring.

Originally published in the Oklahoma Bar Journal — May, 2023 — Vol. 94, No. 5