Law firms make easy pickings for embezzlers
Leigh Jones over at NLJ usually gets it right. But this time I have to take exception to an article with the same title as this blog post. And I’ll link to it below but first I want to explain my misgivings.
The fact of the matter is that law firms of all sizes (but especially small firms) have been victims of embezzlement for at least the ten years I have been at the business of law firm management. This is NOT a growing trend. The only thing the economy has done is squeeze cash flow so tight for some law firms that they can no longer hide the problem or sweep it under the rug when an unsupervised employee walks away with tens or hundreds of thousands of dollars.
The second thing I feel it is my responsibility to call to your attention, my loyal readers and Members is that you don’t need a forensic accountant to prevent or discover embezzlement. Forensic investigators don’t prevent, they only discover. And all you have to do to discover is pay attention to the six key numbers that I have been standing up here on my soap box ranting about for the past oh, 9 years or so.
You watch those numbers and you are no more likely to miss embezzlement than you are to run out of gas in your car if you’re keeping an eye on the gas gauge.
While we’re on the subject, as any forensic investigator will tell you, the best way to avoid embezzlement in the first place is to demonstrate to employees that you are in fact watching the numbers.
As I have recently shared in this very blog and in Twitter @RJonRobins I myself was a victim of embezzlement. But because I watch my numbers my (former) employee only made off with under $500 before he was caught, the password changed, account closed and his butt kicked-out.
Of course I could have taken more drastic measures to prevent the fraud in the first place, but that would have been a poor use of my time & hamstrung me from being able to delegate certain tasks that are not the highest & best use of my time.
Employees don’t usually just steal a hundred thousand dollars all at once. No, they start by stealing a little. They don’t get caught because you’re not watching the numbers and so they go back for more. This is how it has happened in 99% of all law firm embezzlement cases.
If you’re interested in learning more, post a comment or email [email protected] and let her know you vote for the next teleseminar to be about Fraud Prevention For Small Law Firms and we’ll get it on the calendar.
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