I was instructing a class of 2L and 3L students at Drexel’s Earl Mack School of Law this past Monday, and included was my recommendation to use a credit and criminal records check for any potential new hire who would be handling client money, as a fraud prevention strategy . In passing I indicated that there are certain legalities which will apply in order to do it properly, so as not to discriminate or violate privacy rights.
Today I received a Labor and Employment Alert from Ballard Spahr entitled “OFCCP Issues Guidance on Use of
Criminal Records in Employment Decisions” and the timing could not have been more perfect. The guidance issued on this topic was issued by the EEOC Commission on April 25, 2012.
I continue to be grateful to Ballard Spahr’s hard-working and knowledgeable attorneys who keep pushing essential information out to people like me, in clearly understandable language. It’s not the first time I have cited them and provided a compliment — something I don’t give too freely.
Attorneys have an obligation under Rule 1.15 [Safekeeping Property] to exercise a reasonable amount of care and due diligence in protecting client property. When hiring employees who will handle client money — bookkeeper, estate paralegal, secretary in a small firm — the firm should check into the applicant’s criminal and credit history. Failing to do so can have serious consequences, not least of which is the PR. One law firm in Montgomery County found out the hard way. They hired an estate paralegal without doing a reference check, let alone a criminal or credit check. Only after money was stolen did they discover that the employee had previously worked for a law firm in New York, where she had been arrested for the same crime, and was out on bail when the PA firm hired her. She was paying restitution to her former firm from the funds she was stealing from her new employer. That’s about as bad as it gets.
Be sure to review the EEOC Guidance, or consult with a qualified attorney, so that you do it properly, and in a manner which does not have a disparate impact based on race or ethnicity, or any other protected category. Yes, you have to be careful. However, failing to check at all is taking a greater risk, and may create exposure for your firm for failing to take reasonable precautions in determine who handles client property.
While I’m doling out thanks, I wish to express my appreciation to Debra Speyer, the adjunct profession at Earl Mack, for bringing me back as a guest lecturer again this year. I provided the students with an introduction to best practices for financial and procedural management. It feels great knowing that at least a few of the new generation of baby lawyers will have some “real world” practical information when they graduate and join a firm or hang out their shingle.