Legal Risk Management in the Department of Justice

6.0. RECOMMENDATIONS AND MANAGEMENT RESPONSE

• 6.1. Introduction
• 6.2. Issues

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6. RECOMMENDATIONS AND MANAGEMENT RESPONSE

6.1 Introduction

The evaluation concludes that legal risk is being managed by the Department of Justice. However, the need for a consistent, flexible and integrated approach to LRM across the Department is the over-arching message from this report. DOJ counsel have an intuitive understanding of how to manage legal risk "lrm" but a more limited understanding of "LRM" - the LRM Initiative - its tools, processes and expectations. Following the devolution of LRM in 2003, portfolios, regions, LSUs and sectors developed LRM processes and tools that responded to their respective operational contexts. While devolution strengthened LRM at the local level, it also resulted in a diminished national vision particularly since few new national LRM tools have been developed and no national training has been offered during this period. These and other factors have led to inconsistent practices with respect to: identifying and assessing (and re-assessing) legal risk; communicating legal risk; consulting about legal risk (inter- and intra-departmentally); and managing risks using LRM tools and processes.

This chapter discusses eight issues arising from the LRM evaluation and provides ten recommendations. It also contains the management response to these recommendations, which has been prepared by LPMD.

6.2 Issues

• Issue 1: Common Objectives

  The evaluation identified the need for department-wide, results-based objectives for LRM. These objectives should be developed as part of a broadly-based consultation process with legal counsel, managers and client departments. What is it that the DOJ is trying to accomplish through LRM? What results are we seeking? How would we know when we have achieved these results? Do other departments and agencies agree with, and support our approach? Ideally all practice areas of the Department and organizational units (i.e., regions, portfolios, LSUs, sectors) should have the capacity to articulate, measure and report how their legal risk management process supports the department-wide objectives and contributes to the overall management of legal risk. The common objectives will result in a more consistent and integrated approach to LRM in the Department, and should allow for considerable flexibility in the implementation of LRM tools and processes provided that the agreed-upon objectives are being achieved.

  Recommendation 1:

  Develop results-based objectives for LRM that encompass the range of practice areas in the Department (including litigation, advisory work, legislative services, policy and programs), supported by a modest performance measurement and reporting strategy.

  Management Response:

  Agreed. The LRM Division in the Law Practice Management Directorate will lead a departmental process to arrive at an agreed-upon set of objectives for LRM spanning all areas of DOJ's practice. Consultation will also be conducted with the Treasury Board Secretariat and departments and agencies. A modest performance management and reporting strategy will be developed to support measuring achievement of the objectives.

• Issue 2: Standardized Principles and Guidelines

  In consultation with legal counsel and managers in the DOJ and with client departments, there is a need to work towards a more horizontal approach to legal risk management, in which standardized principles and guidelines are developed for key stages of the LRM process in each of the practice areas (e.g., identifying when to involve client departments in assessment/re-assessment of legal risk; characteristics of high risk files - how to define a"6, 7, 8 or 9" file; when a contingency plan should be developed; expectation regarding the management of medium risk files; consistent data entry practices in iCase; if and/or when to report an advisory file). These principles and guidelines would establish the framework for legal risk management across the Department but would not prescribe how they must be implemented or managed. This would allow for a consistent, integrated, yet flexible approach to LRM that would accommodate the needs of various sectors, regions and departments.

  Recommendation 2:

  Develop standardized principles and guidelines to build greater consistency into LRM practices across the Department.

  Management Response:

  Agreed. The LRM Division will lead a process to establish departmental working groups to develop and/or confirm national principles and guidelines for LRM, in all areas of the Department's practice. The development of standardized principles and guidelines will include a review of existing LRM tools and processes and the identification of gaps.

• Issue 3: Partnership with TBS and links to Integrated Risk Management

  In 2000, TBS partnered with the DOJ to establish the LRM Initiative. Involving TBS at the early stages of the Initiative was integral to developing a systematic approach to the management of legal risk across government. As the Department of Justice consults with client departments about the future direction of LRM, there would be considerable benefit from also involving the TBS in this process to ensure that the management of legal risk is considered routinely by all departments and agencies (in consultation with legal services) as part of the management of overall risk by the government. There is more likely to be sustained client "buy-in" and compliance with LRM principles and practices if they are supported by the central agency and client departments are required to report on their LRM activities. Renewal of the DOJ-TBS partnership would underscore the shared responsibility for the management of legal risk at the highest level of government.

  Just as client departments are expected to consider legal risk as part of their overall risk management process, the DOJ should also look at ways of strengthening the links, as well as communicating the distinctions between LRM and IRM within the Department.

  Recommendation 3:

  Re-establish the partnership with the TBS in an effort to integrate LRM more fully into the IRM processes across government. Within the Department of Justice, strengthen the linkages between LRM and corporate risk management.

  Management Response:

  Agreed. Contact will be made with the TBS in the near future with a view to renewing this important LRM partnership. Representatives of the TBS will be invited to participate in an LRM Inter-departmental Advisory Committee which will provide views and input respecting the practice of LRM in the Department, including its relationship to IRM.

  Within DOJ, the LRM Division will work in collaboration with the Strategic Planning, Risks and Scans Division to ensure an appropriate relationship between LRM and overall risk management at Justice, and to communicate any differences in methodology and/or application.

• Issue 4: Roles and Responsibilities

  The LRM AFGS defined the roles and responsibilities of senior management, management committees and individual legal counsel in the management of legal risk. While there is not necessarily a continued need for a document like the AFGS, there is a need to examine the roles and responsibilities of the various structures supporting LRM to determine which are useful, how they can work together effectively and which can either be re-oriented or discontinued. The evaluation has identified some low-functioning groups; others which have not been functioning for some time; and gaps, in particular, the need to include all non-litigation areas of the Department. All sectors/portfolios/regions and practice areas of the Department share the responsibility for managing legal risk and their roles and responsibilities should be formally recognized and included in this process. In addition, the role of the TBS and government departments and agencies and their risk-related committees should also be incorporated into this process.

  Recommendation 4:

  Review the governance structure for LRM in the Department of Justice in light of the newly formed Law Practice Management Directorate and LPM.Com, the structures defined in the AFGS, and the need to integrate LRM across the Department and across government.

  Management Response:

  Agreed. Work has already begun to replace the LRM Accountability Framework and Governance Structure, in a manner that includes the new Law Practice Management Directorate and LRM Division, as well as other formal LRM structures. The new approach will confirm roles and responsibilities throughout the Department, as well as those of TBS and other departments and agencies.

• Issue 5: Communicating and Reporting Legal Risk

  The evaluation found a need to ensure that senior managers and client departments and agencies receive the information needed to support decision making. Communicating legal risk was an area identified for improvement in the key informant interviews, case studies and legal counsel survey.

  Legal risk should be communicated in plain language using consistent terminology that is well defined and understood by both DOJ counsel and client departments. The file review noted that while legal risk was being managed, the communication of risk levels was very general - "high" or "medium" - terms which were undefined. In none of the files reviewed was there any mention of a level of risk that was derived from the risk grid (even though each file chosen for review had been assigned a risk level of "6" or more).

  In terms of reporting on risks, a number of litigation counsel stated that they found existing reporting requirements to be a "burden"; they did not understand why information was requested and how it would be used. This is partly a training issue, as it underscores the importance of demonstrating the value of the information collected to a broad audience. It is also an LRM process issue. Respondents believed that there were some duplicative reporting processes. There is a need to assess which reporting processes are most useful.

  In addition, there is a need to assess whether LRM reporting processes should be formalized outside the context of litigation. For policy, advisory and legislative services files, LRM reporting processes are currently more informal than for litigation. Reporting on non-litigation files is particularly challenging because it can be difficult to decide when to report. It is not always clear when or if, the legal risk will occur. Consideration should be given to whether more standardized reporting processes are needed, and if so, how to implement them.

  Recommendation 5:

  Establish a common language to communicate legal risk.

  Management Response:

  Agreed. Building (among other things) on the good work done by a small senior group and their Report of June 2007 called "The Effective Communication of Legal Risk", the LRM Division will lead a process involving all sectors of Justice to ensure broad consultation on this important priority. Recommendations will be developed for senior management to decide on a common language to communicate legal risks in Justice and to departments and agencies.

  Recommendation 6:

  Streamline the Department's legal risk litigation reporting processes to make them as efficient as possible. Also, consider whether and the extent to which more formalized processes for reporting on non-litigation risks are desirable.

  Management Response:

  Agreed. Work has already begun in the LRM Division to study the reporting requirements for litigation and how this information is used, with a view to avoiding duplication in this area. Consultation will be required with departments and agencies to ensure that all reporting needs are being met. Consideration will also be given to improved technological solutions in this area.

  Reporting processes in other legal practice areas in the Department will also be examined to assess the merits of more formalized national reporting processes for non-litigation risks.

• Issue 6: Prevention of Legal Risk

  The prevention of legal risk was always considered an important part of the legal risk management activity spectrum. Early LRM Initiative documents commonly referred to the prevention of legal risk and the use of such mechanisms as Instrument Choice and Dispute Resolution. They focused on the importance of avoiding litigation where possible, and finding alternate, perhaps more cost-effective solutions to achieve a policy outcome, while reducing reliance on traditional tools, such as a law (a statute or regulations) or recourse to the courts. The evaluation noted that the prevention side of LRM remains an underdeveloped area that needs to be more fully integrated into LRM. There is a need to examine how DOJ advisory, legislative services and policy and programs could work together more effectively to prevent or reduce legal risk and what processes and training need to be put in place to effect this.

  Recommendation 7:

  Renew efforts to promote practices that help to prevent legal risk.

  Management Response:

  Agreed. The prevention of legal risk is an important element of legal risk management, exercised in partnership with departments and agencies. The renewed LRM strategy will focus on promoting the regular exchange of information across areas of practice, with a view to enhancing the Department's ability to identify and manage horizontal legal trends. We will actively pursue opportunities to work with other federal departments and agencies to promote practices that help to prevent or minimize legal risks where possible. LRM training will also include tools, processes and strategies regarding the prevention or mitigation of legal risk, including instrument choice and dispute resolution.

• Issue 7: LRM Training and Continuous Learning

  Another way to improve consistency of practice is to provide a standardized LRM training program to DOJ legal counsel and clients. While there was a broadly-based recognition that "lrm" is part of what lawyers always do, the legal counsel survey showed that while counsel say they have a good understanding of "LRM", they are largely unaware and/or have never used a significant number of the existing LRM tools, committees, advisors or processes.

  Consideration should be given to developing training that includes, but is not be limited to: standard principles and guidelines for all LRM practice areas; how to identify, assess, communicate, mitigate and manage legal risk; how to advise and provide options to prevent legal risk; use of LRM tools, including iCase; roles and responsibilities; instrument choice and dispute resolution. While training should be provided to all legal counsel in the Department, priority should be given to those who have worked for the DOJ for less than five years, who have not received any LRM training and whose knowledge of LRM is less complete than that of the more experienced lawyers. Consideration should be given to requiring this training as part of every lawyer's departmental orientation training. More senior lawyers and those who have worked for the Department for more than five years and who are most likely to have a better understanding of LRM, should also receive training but at a more advanced level. Training should also be developed for client departments to ensure that the shared responsibility for the management of legal risk and the implications of this shared responsibility are fully understood.

  Beside formal training sessions, there is also the need for opportunities to share experiences and to talk to other LRM practitioners across the country. The 2007 Vancouver Retreat was viewed as an extremely valuable experience because it represented the first opportunity people had had to talk about the practical aspects of implementing LRM. People are interested in learning about things that work and don't work and would like to have the opportunity to meet on a more regular basis to talk about the challenges facing LRM practitioners. Consideration should also be given to inviting client departments to participate in these sessions as well.

  Recommendation 8:

  Develop a comprehensive LRM training program.

  Management Response:

  Agreed. Once LRM objectives are clarified and standardized principles and guidelines agreed upon, a comprehensive training plan will be developed and rolled out through the Department. This will include orientation on LRM for lawyers new to the DOJ, and refresher modules for those with more LRM experience. Work will also be done to ensure appropriate LRM training is also available to departments and agencies, where required.

  Recommendation 9:

  Develop ongoing opportunities to share information and best practices among LRM practitioners, managers and departments and agencies.

  Management Response:

  Agreed. An LRM Network will be confirmed in the Department that will provide an institutional mechanism for ongoing information sharing and exchange of best practices with respect to LRM. Processes will also be developed to ensure that LRM information and best practices are more widely communicated to Justice counsel to enhance their understanding and knowledge of LRM.

• Issue 8: Information to Support LRM

  Currently, the Department does not have the information to fully support scanning and trends analysis in LRM. There is a need to build capacity to analyze legal risks across sectors/portfolios/regions and the Department as a whole. Consideration also has to be given to deciding the nature of the information needed to support the prevention, management and reporting of legal risk in each area of legal practice.

  The Department will also want to be able to measure the extent to which each sector/portfolio/ region is working towards the achievement of the common LRM objectives. The performance measurement strategy proposed in Recommendation 1 will require the establishment of a modest number of practical performance measures for all areas of legal practice. This measurement strategy should be supported by data collected from the LSUs, regions, portfolios and DOJ headquarters and be used to inform management decision-making about LRM.

  Recommendation 10:

  Improve the quality and reliability of information to support LRM.

  Management Response:

  Agreed. Work is already underway to improve the quality and accuracy of data captured in iCase, the Department's case management system. In order to be useful, this data needs to be relevant, consistent and up to date. Communication and training activities will be conducted to raise awareness on the role of managers and practitioners in ensuring integrity of LRM data. In addition, consideration will be given to what additional data is required and how to obtain it if it is not currently captured, in order to perform trends analysis; improve reporting in all areas of practice; assess the achievement of LRM objectives in each sector of the Department; and to inform management decision making in this area.

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