Legal Definition of HRO
HRO, or High Reliability Organization, is a term used to collectively describe organizations in numerous high-stakes fields ("HROs"). An HRO generally has to balance reliable, accurate performance with the potential for widespread, catastrophic failure, and must do so on a daily basis. In the legal realm, this typically means going well beyond what could be considered a standard set of "best practices" in either litigation or transactional law – it involves putting into place procedures and standards that can help not only reduce the likelihood of error, but help to catch any errors that do occur. Given the high-stakes nature of any legal proceeding, and particularly those that involve sophisticated issues that are difficult for those who are not experts in the relevant field , an attorney must typically be prepared to take extraordinary measures to verify that everything that has been filed with a court, as well as all information given to the opposing party and any discovery undertaken, is reliable and accurate. This is because those who are affected by a successful breach of confidentiality in a trade secrets dispute, a medical malpractice case, or a complex business transaction are among those most likely to be unhappy with their attorney — frequently they will not be able to appreciate the technicalities of the law that have gone wrong, and they will only be able to see the devastating effects upon their lives in the aftermath. An HRO framework serves to avoid these problems, and to keep clients from suffering undue harm and losses due to an attorney’s oversights.
Seven Characteristics of HROs in Law Firms
The distinct characteristics of HROs that allow them to provide the level of reliability and efficiency that they do, are important in the law industry as well. Many of these techniques can be taken directly from the method in which HROs are defined. The first is that Redundancy is built into the system. The system is designed to be redundant in its operations. This enables a swift response to problems that may arise. The medical world has multi-million dollar machinery to support staff in a certain department. In a law firm, this would look like having the right components in place to allow for the system to continue operating in the event that one of the components should fail or break down. This is partnered with Deference to Expertise. The HRO has the ability to adapt and overcome challenges at the hands of the human element of those involved with the HRO. Deference to expertise exists when the frontline workers have the flight experience or expertise to handle the task at hand. HROs operate with a sensitivity to operations. This is a term used by Weick and Sutcliffe to define a continuous awareness and vigilance to the processes within an organization. In sensible terms for the legal industry, this would involve the elements of operational data and a high standard of value to the services provided. The proactive consideration of this operational data allows for agencies to make a more intelligent and timely response. HROs also practice commitment to resilience. This is defined by the cognizance that in the event of an error or problem, the HRO has processes in place to adapt and respond. In the law industry, this involves the right knowledge and processes in place to be able to react efficiently when a problem arises. Procedural Sensitivity refers to the process of defining the functions of a large organization. For example, a law firm should define and know how a case is going to unfold if a certain set of circumstances occurred, such as a partner leaving the firm suddenly. Legal professionals in the firm should be familiar with how the case would proceed in that kind of situation, allowing for a smoother transaction that would not reduce symptoms of CRM. It should be noted that implementing HRO processes should not be done in haste. Each of the characteristics of HROs work together to create an efficient and reliable environment. Implementing one without considering the entire system could be highly detrimental to the process.
Implications of HRO Status in a Law Firm
For employers that qualify for HRO status, there are several important legal implications to be aware of. While many of the applicable obligations are similar to those that apply to large firms, the FMLA and ACA impose additional specific requirements for HROs.
For example, the FMLA’s coverage test states that all employees "of an employer for each working day in each of 20 or more calendar workweeks in the current or preceding calendar year" must be counted as employees for determining coverage. 29 CFR § 825.104. The regulations further clarify that "evidence that a seasonal or temporary employee worked for a covered employer during a workweek is sufficient to establish that the employee is an employee of that employer for purposes of determining the employer’s coverage." 29 CFR § 825.104(a)(2). This is significant in some industries where large numbers of seasonal workers are employed and/or businesses rely on nonemployees.
Likewise, the ACA requires that an HRO must provide all employees and dependents with access to an AH1 plan regardless of full-time status. Treas. Reg. § 54.4980H-4; I.R.S. Notice 2013-17. Thus, part-time employees must be offered ACA-compliant coverage.
Note that a seasonal worker that earns less than $1,600 during the year must not be counted when determining whether an employer has 50 full-time employees or equivalents. 29 U.S.C. § 4980H(c)(2)(B)(ii). Also, FT workers are counted using the same equivalency rules that apply for ACA purposes.
How to Become a HRO in a Law Firm
Legal service as a high reliability organization is possible. The law firm that is committed to achieving this operational standard must first "figure out who they are and what [they] can realistically accomplish." Only by genuinely understanding their strengths and challenges can firms make reasoned choices about what they should focus on. Such firms will have successfully weeded out bad prospects and moved out mediocre people. They should also be able to withstand significant pressure from a client. When you strive to be a HRO, "you can’t pretend you can do it all; you have to make sure that the client knows what they should expect."
The HRO law firm would have developed a culture that welcomes constructive dissent and encourages the identification of errors. As such, these firms will be constantly tolerant of error to the point of being vigilant against the possibility of an undetected error being the source of their next crisis. "To develop a more reliable organization you must build a culture that is alert to the threat of error. It must recruit and train people who share values of personal accountability . " If a report or log entry is not signed and dated, it is just "loud space." Without time and dates, "something important may slip through the cracks and resurface years later to create a problem."
The practical steps law firms can take to achieve HRO status include:
• Keeping a monthly record of all late filings, including those that are late not because of an error but simply because of the speed at which the court system moves.
• Assigning one senior lawyer in each practice group to ensure timely filing and follow through on the receipt of confirmation that the paper was properly filed.
• Conducting regular, formal supervision of junior lawyers to identify any weakness in attention to detail.
• Conducting exit interviews of partners and employees to find out where they believe processes in the firm or department should be tightened up to prevent future crisis.
• Forcing attorneys to set aside time to spend filing, reading and annotating entries in registers of actions are two places to start.
Holistic attention to the entire process can ensure that the small errors that are easily prevented do not occur.
Examples of HROs in Legal Settings
In this section we consider a number of case studies that are relevant in assessing the experience of other legal organisations that have implemented HRO principles. This will also assist us in assessing the pros and cons of adopting an HRO model for organisations that may be considering making the shift.
One of the earliest indications of the relevance of HRO in the legal sector was a paper delivered at the European HRM Conference by Professor Sandra Chan and Professor Debra Bruck from Melbourne Business School, which considered American law firms adopting HRO principles. This paper describes the experiences of Australian law firms in adapting HRO principles to their organisations, focussing on the implementation of HRO principles in the context of several well known Australian law firms. This paper notes that while it is difficult to measure the benefits to law firms operating under an HRO model, there are clear reasons to believe that the HRO concepts can be applied successfully to law firms, and that members of the legal profession are heavily committed to successfully implementing such concepts.
This paper focuses on the idea that HRO concepts can be applied to the legal profession in the context of two aspects: Decreasing the probability of negative events, and increasing opportunities for performance. The Australian legal context is noted as being a field of great complexity and uncertainty, with a high likelihood of conditions changing over the course of a period of time, and hence the legal environment is considered a good candidate for HRO principles to be applied.
Another example of a case study involving the implementation of HRO principles in the legal system is the series of studies conducted by Professor Rodney L. Lowman from the Graduate School of Professional Psychology at the University of St. Thomas. Professor Lowman presented on instances of HRO in the legal domain in his paper "The Uncertain Law in a Law Firm: High Reliability Organizations Theory and Institutionalization of Ethics In Law Practice", presenting on an American law firm that had used HRO concepts to improve their business.
Professor Lowman notes that a law firm must balance the reality that both success and failure are possible, but HRO principles give them an edge in succeeding by being able to respond immediately with meaningful action in order to preventing the escalation of problems. Professor Lowman notes that they need to manage the complexity of legal practice, manage errors, work under constant stress and uncertainty, exercise judgement of ultimate legal importance, and deliver services under conditions of formidable urgency. In this environment, the law firm has explicitly adopted the concept of HRO in response to this need in order to maintain consistent success.
Professor Lowman concluded that the medium-large law firm in question had been able to build (or institutionalise) an HRO culture, and that they succeeded in outperforming their competitors, and delivering consistent quality under a consistent availability; something that they ascribe to the pre-existing commitment to quality and professionalism of their lawyers. Further they succeeded at not succumbing to law firm fads, and that their practice management was seen as transparent and ethical.
In summary, while there is limited information available on how HRO principles have been implemented in the legal sector, and what the outcomes have been, the limited information available suggests that they have had some success.
Applications of HRO Principles in Law Firms
When translating the concept of HROs into the legal world, certain challenges arise. One of them is the lack of empirical research specifically related to the legal sector. Most of the literature related to HRO comes from the aviation, nuclear energy, firefighting and other industries for which a failure can be catastrophic. Applying the lessons of HROs to a vastly different industry is no simple task, and the lack of research specific to the legal industry makes the task of creating a road map for its implementation all the more difficult. In 2016, the University of Oxford set out to identify HRO principles, first in high-risk sectors, and then compare those to how they are implemented and practiced in the legal sector . From this source unique to the legal sector, the first real comparison of HRO principles and practices in high-risk industries to that used in the legal sector could be made.
More broadly, risk-averse attitudes and cultural issues can act as an obstacle to the implementation of HRO principles and practices in the legal sector. Accepting the need for dramatic change requires buy-in from lawyers and law firms. The culture, politics, and internal structures of the organization must adapt to the new method of practice. This represents perhaps the biggest challenge in HRO implementation for law firms and other legal institutions. We will explore the findings of this project and its implications for legal institutions in greater detail in other posts on this blog.