File reviews are an important part of that supervision system – nobody has yet devised a better way to quickly and effectively monitor files. Here are our seven tips to help COLPs conduct file reviews.
The purpose of file reviews is not simply to look for errors – in fact, we should not really expect to find any. A file review is primarily aimed at benchmarking the conduct of the file against the firm’s compliance procedures. Part of the COLP’s job, don’t forget, is to put in place effective systems and controls to ensure compliance with the Handbook, and then monitor how well those systems and controls are working in practice.
File reviews can be used as part of the performance management/appraisal system, and file handlers can also use them as a way of progressing ‘mental block’ files, which might otherwise sit in the cupboard for a while longer.
It is important to remember that file reviews are only a part of a firm’s overall supervision arrangements. They can only ever be performed on a small proportion of on-going matters. Most firms will have devised additional ways to supervise, such as:
• incoming post being sent to a supervisor first
• supervisors being cc’d in on substantive e-mails
• ensuring that important documents are signed off
• regular file progress meetings
• having an open-door culture
• ensuring the availability of a supervisor at all times
Most firms do not have the luxury of employing non-fee earning supervisors and so it is important to conduct file reviews efficiently. You need to take a structured approach to the process.
1. Decide whether you are going to select files randomly, those that you know carry the greater risks, or a combination of both. Do not rely on a file handler to select the files for review, for obvious reasons.
2. Set aside time in your calendar to conduct a number of reviews, and treat the time as ‘unavailable’. If you do not, you can guarantee that something more important will come along.
3. Decide whether your review will include an assessment of the legal advice and how well the file handler has carried out the client’s instructions. These “substantive” reviews will take longer and should therefore be undertaken sparingly.
4. Avoid the temptation to read the file in full. You should be aiming to have a broad overview of the file by picking out the key documents and updates, as well as looking at the general tone of correspondence and the timescales involved. A well-designed file review form can help (see below).
5. The COLP should keep a record of all file reviews, so that s/he can see that they are being completed, and that risks are being appropriately identified. It will also give supervisors the impetus to keep doing them because otherwise the COLP will start chasing.
6. How many files should be reviewed? There is no magic number, but one per month per file handler sounds about right. There may be reasons to increase or decrease that number, based on the file handler’s experience, competence, the number of high-risk files they deal with, as well as the firm’s resources.
7. Delegate – there is a lot of value in less senior file handlers reviewing their own files, as well as those of their peers and even their supervisors. It can be used as a training tool by learning how more experienced colleagues tackle complex problems, and deal with clients, experts and other parties.
Using a template
It is probably a good idea to use a standard form to carry out file reviews, as it ensures a consistency of standards across the board, and helps to overlooking the little details. Some firms produce department-specific file review forms, while others will focus on a more generic layout.
Have a look at our sample File Review Form.