Hope for the best, prepare for the worst

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Edward Poll
Dolan Media Newswires

It’s an election year. And if you’ve been paying attention you know that, at the very least, a policy change — perhaps a big one — is on the way.

Many of the incoming policies, whether domestic or international, could affect your bottom line. For example, health care mandates could affect how many workers you are required to cover and how much coverage you are required to provide.

New laws might be passed into legislation that could impact your business and the decisions you make. If the reins change hands, that possibility becomes all but a certainty.

So what should you do about it? Unless you want to become an activist and lobby your legislators, the best you can do is be prepared. Is it possible to prepare for every eventuality? Of course not. However, it would be imprudent not to make the most basic preparations.

One basic way is to have a solid, varied base of clientele. If you are counting on a few large clients, you are not preparing yourself for situations in which one of those clients might leave.

You should make sure all your paperwork, such as letters of engagement and contracts, is in order.

Make sure you have policies in place for use of technology, both current and emerging; and make sure all your colleagues and staff follow those policies.

Check all your bank communications are on file and up to date. Continually update your paperwork, including cash flow forms, and regularly communicate with a bank representative in order to maintain a good working relationship.

Is it possible a new administration will drag the country into a war? Plan for the worst with insurance.

One type to look into includes “business-interruption” coverage, which applies to the business side of your practice when it is interrupted by a disaster that drastically reduces or even eliminates current revenues.

Business interruption insurance includes business income insurance, which is designed to replace income that otherwise would have been earned by the business had no loss occurred; extra expense insurance, which is coverage designed to pay for necessary expenses incurred during the period of restoration of the property; and contingent business interruption insurance, which is an extension of coverage designed to cover loss of income that you incur in your business owing to a property loss at a key client location.

A disaster can jeopardize confidential client records, work product and other documentation, such as master files, time and billing records, court filings, wills, powers of attorney, corporate records and any other materials that law firms are required to keep.

Many such documents are kept as active computer files and could be compromised by a hacker. Thus, cyberinsurance might be a worthwhile investment.

As with any major event, the election will lead to some changes. We will all hope for the best — whatever that may mean to you — but should definitely prepare for the worst.

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Edward Poll is the principal of LawBiz Management. He can be contacted by email at edpoll@ lawbiz.com.

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