Avoiding Litigation Through Effective Communication
One of the best ways for CPA firms to mitigate the risk of a professional liability claim made against them is through effective communication with clients. Indeed, a 1997 University of Chicago study suggested that how a physician communicates with patients influences whether the patient sues the doctor for malpractice after a bad outcome. While the services you offer are quite different from that of a physician, this lesson applies to your interactions and communications with clients as well.
Before the Engagement
- Prospecting and proposing – Ask probing questions to give the potential client clarity regarding the services you are able to offer
- Engagement Letters – One of the primary tools to help reduce the expectation gap between client and the CPA. It is often best to discuss the engagement letter with the client rather than sending via email
During the Engagement
- Addressing Issues – Time is rarely a friend when it comes to issue resolution. Discussing items with the client early on will help all parties in the solution
- Managing Scope – Make sure to confirm the scope of any changes or additional services that the client requests. Document all discussions!
After the Engagement
- Post-Engagement Debriefs – Asking the client for feedback provides an opportunity for the client to ask questions and provide feedback to use in future engagements
- Mediation – If a dispute arises, suggest mediation as a first step toward resolution. This is a more formal method of communication and should be agreed upon in advance