No Honor Among...

This tidbit comes to us courtesy of Ernie The Attorney:

New Orleans law firm dissolves in wake of embezzlement by financial officer

From today's local newspaper comes the story that the local legal community has been talking about for several days:

"Stunned by allegations that its chief financial officer stole at least $2.5 million out of its operating fund, a New Orleans law firm whose masthead listed a former city attorney and former state bar association president has shut its doors, fired the administrator and had him arrested for theft."

The firm's financial officer had stopped using the independent company that processed the firm's employee payroll. Then, over a period of four years, he diverted the payroll taxes to his own account. The firm's partners didn't notice the problem, but the IRS did.

The big lesson from these sorts of events is that law firm managers have to resist the temptation to blindly trust people just because they've been around for a long time. I know it sounds cruel, but running a business is primarily about making sound management decisions. In this case, the inclination to trust one employee (who had been with the firm for 20 years) created a situation that harmed not just the firm's partners, but all of the other employees. I wonder how many other law firms around the country are vulnerable to this sort of thing? Probably more than we think.

That reminds me of an old Groucho Marx comment:

How do you get along at the office? Do you trust each other? Or does each have a separate safe for his money? -- Groucho Marx, to lawyer Joseph Welch after seeing the long list of attorneys on the firm's stationary.

(From Lawyers and Other Reptiles by Jess M. Brallier)

Ah, just another day in the office.

File under The Legal Profession.

8:15:13 PM    Go ahead, make my day  []  trackback []  

When Irish Eyes Are Smiling

Ah, the power of Guinness.

File under Stuff That Don't Fit Anywhere Else.

7:45:04 AM    Go ahead, make my day  []  trackback []