Risk Management and Liability Flashcards
7 cards from real ALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Management and Liability flashcards as text
A client alleges the firm missed a statute of limitations deadline. This claim would MOST likely fall under which policy?
Answer: Professional liability (malpractice) insurance
Missing a statute of limitations is a classic professional error (negligence), which is covered by professional liability or malpractice insurance, not general liability policies.
When performing a qualitative risk analysis, analysts typically assign risks a rating based on:
Answer: Descriptive scales such as high/medium/low for likelihood and impact
Qualitative risk analysis uses descriptive scales and expert judgment to categorize risks, unlike quantitative analysis which uses numerical data and statistical models.
A partner at a law firm serves on a nonprofit board and then brings that nonprofit on as a firm client. Which risk does this scenario MOST directly raise?
Answer: Conflict of interest
A lawyer's personal relationship or financial interest that could materially limit representation creates a conflict of interest requiring disclosure and, often, client consent.
Which COSO ERM component involves identifying what could go wrong in achieving organizational objectives?
Answer: Risk assessment
The risk assessment component of COSO ERM encompasses both risk identification and analysis to determine how risks should be managed.
A firm discovers its IT vendor stores backups without encryption. Under which risk category does this gap PRIMARILY fall?
Answer: Operational risk
Unencrypted backups represent a failure in internal processes and systems used to protect data, placing it in the operational risk category.
A law firm administrator is creating a risk register. Which information should be captured for EACH identified risk?
Answer: Risk description, likelihood, impact, owner, and mitigation plan
A comprehensive risk register includes the risk description, probability, impact rating, assigned owner, and the plan to address it.
Which legal concept holds a law firm vicariously liable for a supervising attorney's failure to adequately oversee an associate's work?
Answer: Negligent supervision
Under negligent supervision, a firm can be liable when a supervising attorney fails to exercise reasonable oversight of subordinate lawyers, and that failure causes client harm.