A small law firm partnership can be like a marriage. Through good and bad times many partnerships stick together and work things out. But when things go bad in a law firm between attorneys, they can really go bad. Once communication breaks down it can lead to more drastic actions. More than we care to count we are contacted by one attorney or the other because the locks have been changed on the law office, access to client files restricted, and the access to computer systems denied. Even had a few where one of the attorneys moves out over the weekend without notifying the other attorneys in the firm taking ‘their’ client files with them.
As disputes escalate, the attorneys start alleging malpractice against each other. When adults do not play well together your attorney malpractice insurance is not intended to cover these disputes. There is no malpractice coverage for this.
The typical exclusion for this is the type found in the current AXIS Insurance Company Attorney Malpractice Policy:
“5. Insured versus Insured. For the purpose of this exclusion, the term “insured” shall mean “you.” This policy does not apply to any claim made by one or more insured against another insured unless an attorney/client relationship exists between such insureds.”
An Attorney Malpractice policy may have some coverage for employment practices defense coverage. In this case the exclusion may not extend to that coverage. It should be noted though that the Employment Practice coverage is normally “Defense Only” and sub-limited.
Outside of employment practices defense, malpractice insurers generally will not provide any coverage for internal disputes between attorneys in their own law firm. If attorneys start budding heads don’t expect your malpractice insurer (or agent) to mediate.
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080