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Webinar programme report: How does a firm onboard clients? Unworthy clients – who decides? What are the risks?

Tuesday 8 February 2022

Rachel Bunbury

Westbury Law Professional Corporation, Toronto

rbunbury@westburylaw.ca

Emma Oettinger

Ashurst, London

emma.oettinger@ashurst.com

As curbs on international travel and other pandemic restrictions continued to dominate in 2021, the International Bar Association (IBA) maintained an extensive webinar programme. Members do miss the interaction of live events, but online sessions can permit more global reach, including through 'on demand' recordings.[1]

On 11 November 2021, the IBA Regulation of Lawyers' Compliance Committee presented its flagship webinar, titled 'How does a firm onboard clients? Unworthy clients – who decides? What are the risks?'[2]

The panel included officers from the IBA Professional Ethics Committee, the IBA International Commerce and Distribution Committee, and the IBA Law Firm Management Committee. The panellists explored key issues that law firms must navigate in designing client onboarding approaches, including competing professional, business and ethical considerations.

Law firms around the world are facing more incidents of media-driven criticism for representing clients deemed 'unworthy' in the public eye, for whatever reason. This scrutiny of client selection, both from within law firms and from prospective clients, can result in reputational consequences and effects on the bottom line. How should lawyers deal with such high-profile instructions upon receiving them?

While many firms have in place a detailed process to manage conflict, and have sanctions and/or anti-money laundering (AML) compliance obligations, questions are increasingly being asked around a wider range of ethical or moral issues, including environmental protection, sustainability, human rights, diversity and equality.

Panellists offered insight into a range of issues involving ethics, compliance, environmental, social and governance factors (ESG), reputational risk and access to justice. Representative speakers from around the globe – and from different-sized firms – explored:

  • the types of issues most frequently raised within law firms;
  • different processes that firms are starting to put in place to help navigate the challenges; and
  • how firms are balancing ensuring access to justice and upholding the rule of law with their own values as a responsible profession and 'good corporate citizen' firm.

Key recommendations from the webinar include the following:

  • law firms should adopt a clear strategy in terms of their desired client base and gauge any potential red flags prior to onboarding the client;
  • client screening should include the consideration of potential conflict of interest, know your client (KYC) assessments, AML legislation, regulatory requirements, rules of professional conduct and any requirements set out by legal insurers;
  • law firms should consider creating a client acceptance team to assist with client onboarding and due diligence;
  • client onboarding should include a consideration of reputational risks to the firm, including ESG factors and human rights issues;
  • law firms must balance reputational risk with access to justice and the rule of law;
  • in discovering malfeasance or unethical conduct during the course of legal representation, lawyers should adhere to internal and statutory whistleblowing policies; and
  • it is important for lawyers to understand their own firm, strategy and client base so that there is an evidence base from which to discuss these issues internally, and, in particular, to understand the decision-making culture in the firm so that lawyers and managers can develop good buy-in across the firm for the processes they put in place.

All the panellists agreed that this is certainly not a clear-cut area. It has many nuances and factors to take into account, and the approach of law firms to these issues will be an evolving one for senior management for years to come.

We have plans to further explore ESG, hybrid working models and other global regulatory trends in 2022.

The Regulation of Lawyers' Compliance Committee also provided members as panellists to other IBA webinars during the year, including a collaboration with the Bar Issues, Bar Executives, and Law Firm Management committees.

Look out for our next major webinar coming soon on 9 February 2022: 'Hybrid and remote working models for law firms'.[3]

Notes

 

[1] See www.ibanet.org/conferences accessed 4 February 2022.

[2] See www.ibanet.org/conference-details/CONF2117 accessed 4 February 2022.

[3] See www.ibanet.org/conference-details/CONF2173 accessed 4 February 2022.