Monitoring members’ bad behaviour – initial steps following an allegation

Allegations of LLP member bad behaviour will often come to the firm’s attention unexpectedly, and situations may develop quickly. Such incidents can, at a minimum, cause disruption to the day-to-day running of the business but could also affect the legal, regulatory, reputational and financial position of the firm.

It is essential that before an incident occurs, the management team understands the firm’s processes on how to promptly address and monitor bad behaviour.

Identifying bad behaviour

Firms must be able to identify from a comprehensive list what behaviours may constitute as “bad”. Factors including disruption, repetition, and impact grade the scale of seriousness as to whether these behaviours are categorised as misconduct or gross misconduct.

Common misconduct behaviours include failure to meet performance standards, offensive language, and minor breaches of procedure and policies. Common gross-misconduct behaviours include theft or fraud, physical violence, and discrimination, harassment and victimisation.

The category of bad behaviour will dictate the monitoring and sanctions to be taken by the firm’s management board.

Communicating standards and expectations

Firms should communicate to members their responsibilities and obligations towards behaviour. Circulating the terms and processes set out within the firm’s LLP Agreement provides members with clear standards of what is and is not acceptable.

Publishing an ancillary member disciplinary policy, whilst not legally binding, may provide further prescriptive guidance to members to encourage standards of conduct and job performance.

Initial steps following an allegation

• The LLP Agreement: this is the starting point of any allegation and should be carefully reviewed to determine what powers the firm will have in case of incidents of bad behaviour and towards monitoring procedures. These processes must be carefully followed to avoid claims of the firm breaching its obligations.
• Initial assessment: an initial assessment of the incident allows the firm’s management team to gather information, particularly on the severity of the behaviour, and identify any immediate risks to parties involved.
• Reporting the incident: firms should review whether a report is to be made to the police or an appropriate regulator.
• Taking advice: consult early with legal advisors if necessary.
• Maintaining an accurate record of the behaviour: a paper trail is essential to the monitoring process and comes into focus if a decision is subsequently challenged by the member involved. Comprehensive record keeping should be maintained throughout the disciplinary process.
• Communication and confrontation: firms must communicate to the member involved the details of the allegation against them, provide them with any supporting evidence and allow them the opportunity to respond.
• Choosing the sanction: once the allegation has been evaluated the firm may, depending on the severity of the bad behaviour and the terms of the LLP Agreement, decide on proportional disciplinary sanctions to be implemented. Informal actions may include continued monitoring and training, setting clear, achievable goals and regular audits of the member’s performance, or removal from a senior role. In circumstances of repeated bad behaviour or gross misconduct, formal action can take the form of suspension processes or even expulsion.
• Lessons learnt: reflection on the incident should be undertaken by the firm to understand whether wider firm action needs to be carried out. These include changes to cultural practices, updating the LLP Agreement or implementing a member disciplinary policy, providing training to leadership on behavioural policies and values or to HR and staff on reporting bad behaviour.

Prevent to protect

Prompt action and effective monitoring against bad behaviour of members seeks to prevent issues from escalating. Comprehensive processes and clear standards allow management teams to make informed decisions to the benefit of those involved and the firm’s business.