Legal Brief for October, 2016

Checklists - An Essential Tool

Legal transactions often involve a lot of moving parts.  In a real estate purchase for example, the lawyer is responsible to check the existing Certificate of Title for any documents that might pose a risk to the purchaser, check the property tax account to ensure there are no arrears of taxes owing, examine a real property report to determine if there are any encroachment issues, arrange with the mortgage lender for the advance of the loan funds, confirm the status of work items required to be completed by the vendor - and that's just a brief sampling of the necessary items.  Many law firms handle multiple such transactions every month, so the number of items to keep track of can increase exponentially.  How to keep track of what has been done or what remains to be done and when it has to be done?

This is where checklists play a vital role in allowing lawyers to process their work in a timely and complete manner.  In my practice for real estate files for example I have basic checklists for purchase, mortgage and sale transactions.  Upon receipt of the necessary information at the start of my work I will then customize the checklist for that particular deal, and will make note of all relevant dates on my system, such as the closing date and the date funds have to be requested by from the lender, and what items and documents I need to obtain or review.  As each item is completed it is then checked off on the list.  This ensures that the necessary items are completed, and also when I pick up a file again after not working on it for a number of days I can immediately see where I am on it and what my next steps should be.

Corporate transactions can be immeasurably more complicated that a basic real estate deal.  If there is a situation where one business is being purchased by another, or shares are being sold, or new shareholders are being brought into a corporation, there can be multiple parties involved, each with their own lawyer.  If there is financing involved, then the lender will also have their own lawyer.  In these cases, the lawyers will collaborate on preparing what is known as a closing agenda.  This document lists all the steps required to complete the transaction, the documents required for each step, and the status of the documents as the matter moves along.  As the number of documents on a corporate deal can sometimes reach into the 100's, it would be impossible for everyone involved to make sure the work was correctly done without such a listing.

Of course the legal world does not have an exclusive claim to needing to rely on checklists to complete work tasks.  Almost any manner of production and provision of services can benefit from the use of checklists.  If anyone is interested in learning more about the important role of checklists an excellent book to read is The Checklist Manifesto by Atul Gawanda, published in 2009.  I highly recommend it.