Legal Risk Management in the Department of Justice

EXECUTIVE SUMMARY

1. Introduction

Legal risk management involves taking actions to reduce the frequency and severity of legal problems that limit the government's ability to meet its objectives. Recognizing that the management of legal risk has always been an inherent part of every lawyer's work, the federal government developed the Legal Risk Management (LRM) Initiative in 1999 in order to bring a more systematic approach to identifying, mitigating, and managing legal risks. In 2003, the LRM Initiative evolved from a time-limited initiative, with a project office and dedicated human and financial resources, to an ongoing initiative that was integrated into the overall work of the Department.

The LRM Initiative has three main components:

The purpose of the evaluation is two-fold: to examine the implementation of LRM in the Department since 2003; and to assess whether the processes and structures established to support LRM have contributed to the effective management of legal risk in the federal government.

2. Methodology

The evaluation was comprised of six lines of evidence: an extensive document review, 48 key informant interviews, a survey of the Department's legal counsel, four case studies, a review of 69 legal cases closed between 2003 and 2008 and three focus groups with 13 client departments.

3. Findings

3.1. Rationale for the LRM Initiative

The Department continues to face the challenges of increasing demands related to litigation and legal services generally. With its goals of identifying legal risks early, assessing their potential effect, and then using strategies to manage the risk so that legal problems can be reduced or avoided altogether, the LRM Initiative serves to address the expanding need for legal services. Counsel also attest to the continued relevance of LRM. They believe that through its systematic approach to addressing legal risks, LRM helps them to manage files more effectively and to improve the quality of legal services provided to departments and agencies.

3.2. Implementation

Effects of devolution

Following the closure of the LRM Office, the Initiative lost momentum nationally as the strong central vision for LRM faded: few new tools or guidelines were developed; and LRM training was not offered department-wide. Moreover, the Department's non-litigation legal activities (advisory, policy, and legislative services) had not yet been fully integrated into the Initiative. As a result, the prevention side of LRM (avoiding and mitigating legal risks before litigation) remains under-developed.

The devolution of responsibility for LRM to all Department employees runs contrary to a central tenet of risk management - the need for an integrated, systematic approach. On the one hand, devolution has resulted in uneven and inconsistent LRM practices across the Department. On the other, it has created robust LRM approaches tailored to the operational needs of particular units within Justice, units that have taken strong ownership of their LRM practices. Indeed, concern has been expressed by LRM practitioners that the renewal of LRM should not be at the expense of such innovative practices and should remain flexible in its approach.

Governance

The evaluation found that the Accountability Framework and Governance Structure (AFGS) for LRM is out-of-date. Several components of the AFGS, such as the LRM Steering Committee and the LRM Practice Group are no longer active, and some parts of the Department are overlooked (e.g., the Chief Legislative Counsel). The evaluation found that knowledge of the AFGS is low, and that it is not used as a guiding document for management because it lacks concrete direction, such as objectives for the Initiative, that would assist managers in implementing LRM.

In addition, the governance structure of the LRM Initiative changed in 2007. To support recommendations concerning the management of legal services in the joint Justice-TBS Review of Legal Services 2004-2007, the Department established the Law Practice Management Directorate (LPMD) in August 2007. The development of LPMD and its LRM division are part of the revitalization of the LRM Initiative.

Consistency of practice

The evaluation identified several areas of inconsistency in LRM practices.

Management of Legal Risk

Although there are inconsistencies in approach and a reported lack of awareness or understanding of aspects of LRM, the evaluation concluded that legal risk is being managed in high risk litigation, advisory, legislative and policy files. Counsel may not be consciously or systematically performing LRM as envisioned in the Initiative, but they are intuitively managing legal risk. There is widespread agreement among counsel that legal risk management is part of their practice of law.

Reporting legal risk

The evaluation found that the departmental practices for reporting legal risk are generally working as counsel are reporting high risk files to senior officials within Justice and client departments. There are a number of avenues for reporting high risk files, and questions were raised about whether these could be streamlined to avoid duplication. Reporting on advisory, policy, and legislative services files was described as being more informal and less systematic than for litigation, although some counsel believed the informal communication worked in their offices. In order to reduce the perception that LRM reporting is primarily a bureaucratic process, counsel need to understand how these reports are being used and their value to legal work.

LRM tools and structures

The evaluation found that there is limited knowledge and/or use of many LRM tools, including those on the LRM website. The tools that are used most often are: Briefing Notes, Early Warning Report, and Scanning News. Large percentages of survey respondents were either unaware of or have not used most LRM tools or structures. Thus, it appears that many counsel are not involved with LRM processes. Perhaps as a result of this, almost half of counsel did not believe there are sufficient guidelines to assist them in performing LRM.

The evaluation identified the need to create opportunities to share information and best practices among LRM practitioners, managers and clients, in order to enhance the understanding and knowledge of LRM.

Partnership

The LRM Initiative was conceived by the Department of Justice in partnership with the Treasury Board Secretariat. There is a need to revitalize this partnership to ensure that legal risk management is considered routinely by departments and agencies (in consultation with legal services) as part of the overall management of risk by the government. The evaluation also raises the question of how best to integrate LRM more fully into the IRM processes across the government.

The results of the client survey and focus groups show that clients are generally pleased with their LRM partnership with Justice. This partnership is vital to the effective management of legal risk. However, not all clients are equally engaged in the LRM process. When clients are engaged, particularly at the senior level, the LRM processes are reported to be more robust.

The results of the client survey and focus groups show that clients are generally pleased with their LRM partnership with Justice. This partnership is vital to the effective management of legal risk. However, not all clients are equally engaged in the LRM process. When clients are engaged, particularly at the senior level, the LRM processes are reported to be more robust. The evaluation found areas to improve the LRM partnership with the client. There is a perception that not all clients understand their role in LRM. There is also a view among clients that Justice sometimes oversteps its role in providing advice that goes beyond strictly legal considerations.

3.3. Results of the LRM Initiative

There is very little information available to support the measurement of the impact of the LRM Initiative. By far, the majority of respondents to the legal counsel survey indicated that they did not know what the impact of the Initiative had been across the Department. That said, through interviews with legal counsel and focus groups with client departments, the evaluation concluded that LRM has had the following impacts: