A report entitled "Profile of Legal Malpractice Claims 1996-1999," published in 2001 by the American Bar Association Standing Committee on Lawyers’ Professional Liability, provides a statistical analysis of claims data collected from various lawyer-owned and commercial insurance companies for the period January 1, 1996 through December 31, 1999. This report is full of data such as the percent of claims by area of law. Personal injury plaintiff attorneys led the way for a whopping 24.6% of the claims. The report also provides data on claims by type of activity and by number of attorneys in the firm. The most troublesome activity was the preparation, filing and transmittal of documents, which accounted for 25.24% of the claims during this time. Firms of 1 to 5 attorneys were responsible for 73.2% of all claims. Remember, however, that the majority of attorneys work in smaller firms, and so this 73.2% figure does not reliably forecast whether there is more risk associated with smaller firms.
This article focuses on the percentage of substantive claims that arose during the study period. As a risk manager, I am seriously concerned about that percentage, and many attorneys have responded with surprise when learning the percentage. The percentage of substantive claims in this study was reported to be 56.29%! This means that 56.29% of reported claims were based on failure to know the law, failure to properly apply the law, failure to know or ascertain the deadline, inadequate discovery, a conflict of interest, a planning error, and failure to understand or anticipate tax consequences, along with a few other substantive errors. As a risk manager, I am concerned that the problem of substantive legal errors is very difficult to repair through risk management techniques. Substantive errors arise out of an attorney’s abilities, and not out of office procedures.
A risk manager can help an attorney develop a more effective calendar system, or tighten up file documentation. But it is far more difficult to discuss and address what in reality is often simply bad lawyering. Here are a few suggestions that, if taken to heart, can help reduce the risk of substantive claims.
The first practice tip is one that you probably have heard repeatedly – don’t dabble. Truly, there is no such thing as a "simple will" or "simple contract." What first appears as a simple contract in reality may be a trap for the unwary, because the attorney may not be aware of a unique and not widely know local law that significantly affects the contract’s terms. Sometimes work appears simple when it is not, simply because the attorney doesn’t know what questions to ask. If the work your client requests is beyond you comfort zone or outside of the areas in which you regularly practice, don’t accept it. If you do accept it, then be sure to seek guidance from an attorney knowledgeable in the practice area, to ensure that you have adequately addressed the client’s matter.
Prioritize CLE for all members of the firm. Far too often attorneys attend CLE at the last minute, taking whatever program is available regardless of whether the program applies to the attorney’s practice. Also, it is common to see attorneys doing something other than staying focused on the CLE presentation, or even spending the bulk of the event outside of the meeting room. With alternative formats such as videos, teleconferences and web presentations, the attorney is even freer to pay only half-hearted attention to the presentation, since it is so easy to work on something else during the CLE. The best approach to CLEs is as follows. Take CLE that is appropriate for your practice area. Seek out quality programs and get as much from the experience as possible, by listening attentively, asking questions and reading the supplemental materials after the program has ended. Further, don’t overlook educational opportunities that focus on research or legal writing skills.
Implement a peer review program that seeks to randomly select a few files of every attorney at the firm for review at least once a year. This is not meant to be a critical audit or a performance evaluation. It should be conducted as a quality control process. The review should focus on the entire course of representation. To "pass" the review, the file should document the conflicts check, calendar entry of critical dates, client decisions, client communication and client satisfaction. There should be an engagement letter and a letter of closure. The file should be reviewed for timeliness of work, work product, billing decisions and procedural choices. The firm should not be look for mistakes to criticize, but rather should identify ways that it can improve representation or service, in order to provide higher quality representation and service to the next client. A second benefit of this process will be that the firm may get a "heads up" warning as to a developing impairment problem with one of the attorneys.
Now for a few one-line tips.
- Verify the credentials of all new hires.
- Remember that friends and family members do sue so don’t agree to do favor if you are not fully prepared to follow up in a timely fashion.
- Prioritize personal time, be it with family, friends or in other activities, so that you remain fresh and sharp professionally.
- Listen and seek appropriate help if ever a friend, professional colleague or family member raises concerns about your possibly being impaired, regardless of whether it’s depression, an addiction, or anything else.
- Maintain appropriate workloads, as a sixty-hour workweek for fifty-two weeks a year will lead to burnout.
- Consider the possibility that when you say "no" to certain work this does not necessarily mean that no new work ever will come through the door.
Finally, keep in mind that bad news doesn’t get better with time. If a mistake has been made, deal with it immediately. Inform your malpractice carrier and let the client know. Sometimes the damage can be mitigated, and sometimes the mistake can be corrected, but things only get worse if you miss the opportunity for repair. Most problems do not go away on their own, no matter how much we want them to.
Previous ALPS Risk Management Articles:
ALPS Application for Professional Liability Insurance
Subscribers Only
