Not all fraudsters are strangers. Even partners, associates, law clerks or other employees may turn to fraud because of financial pressures from a divorce, failed business venture, or other personal crisis. Its usually the last person you’d expect, and often one of your most long-standing and trusted employees.
Here are the red flags:
- Someone never takes vacation or sick leave, works overly long hours, or refuses to delegate work.
- A firm member undergoes a sudden change in lifestyle or change in temperament.
- The firm receives mail for a corporation for which no client file is opened or billed, or minute books are kept in the lawyer’s office instead of with the corporate law clerk.
- Unusual patterns such as a sudden increase in payments to a person or credit card company or government, or complaints about slow payment from suppliers or clients, or an increase in written-off work in progress (WIP).
For more information, and directions on what to do if you have a suspected or real fraud, see “Fraud on the Inside: What to do when partners, associates or staff commit fraud” in the Winter 2008/2009 issue of LAWPRO Magazine at www.lawpro.ca/magazine