Being a defendant in a legal malpractice claim is no fun. In addition to the potential cost of an adverse judgement, there is the stress and expense of being away from practicing law to defend yourself. Having attorney malpractice insurance is an essential part of any law firm’s safety net. Simple steps to reduce the likelihood of you becoming a defendant:
1. Client Selection or Don’t ignore that ‘Queasy Feeling’ when working with Clients
During client intake or later that ‘Queasy Feeling’ is a problem client. Signs are:
a. Clients expecting favors, complains excessively or having unreasonable expectations.
b. Potential clients that frequently get themselves involved in tricky situations with a likelihood of adverse results or consequences. These clients are more likely to blame you for their troubles in life when something goes wrong. If you can avoid them at the outset or part ways with them once you get that ‘Queasy Feeling,’ you will certainly reduce your exposure to malpractice claims.
c. The potential client that you are the 3rd attorney that for this matter. According to the client, the 1st 2 attorneys did not handle the case properly.
d. When you get that ‘Queasy Feeling’ learn to say ‘No.’
2. Define the Scope of the Relationship with Engagement Letters
The easiest way to establish certainty in the attorney-client relationship is to use an engagement letter. It should define who the attorney represents and the scope of the engagement. When appropriate, it is good to specify who the attorney does not represent, and what (s)he will not be handling. Doing this will set client expectations and protect the attorney.
3. Use Non-engagement/disengagement letters
If you do not accept the engagement, a non-engagement may be essential in proving that there was not attorney-client relationship. When the engagement is over a disengagement letter will give a date certain to when the attorney-client relationship ended. Remember that a jury will believe the client over the attorney if there is a dispute without documentation.
4. Don’t miss Deadlines
Calendaring errors are a leading cause of malpractice claims. Mistakes include data entry errors, failing to use file review dates, absence of a back-up calendar, accepting a case without knowing the deadlines, and procrastinating until the last minute to file documents. Proper calendaring is a key element of avoiding malpractice claims.
5. Jack of All Trades Master of None
Every licensed attorney has an ethical responsibility to only accept cases that they are competent to handle. Lawyers have gotten themselves into situations where they have stepped far outside their normal practice areas in order to accept a new matter or accommodate a client, and that can easily lead to malpractice claims.
Know what you are good at and what you are not. Learn to say ‘No.’ Don’t be afraid to refer clients to other lawyers.
5. Avoid Conflicts of Interest
Another leading cause of legal malpractice claims is allegations of conflicts of interest. At client intake before accepting a client have a process in place to identify conflicts of interest. Attorneys that represent multiple parties have many masters. Approach these situations with caution. Be aware that getting involved with a client’s business such serving on the board or being a corporate officer may trigger exclusions in your malpractice insurance coverage.
6. Avoid suing Clients for Fees
Approximately 1/3 of all legal malpractice claims are the result of retaliatory suits from suing clients for fees. Have good accounts receivable/collection practices in place to prevent the need to sue clients. Only sue as a last resort.
7. Don’t Give Informal Legal Advice
You want to be helpful and cordial to family and friends, but a couple of drinks at a party with an off the cuff remark about a legal issue when you do not know all the facts might get you in hot water.
8. Be Careful on your Social Media Posts
Remember that you are a professional with ethical standards. Once you post on social media you cannot get the post back.
9. Practice Good Client Communications
Make sure that you have properly set expectations and communicate progress or lack thereof on a periodic basis. Good news as well as bad news needs to be communicated promptly.
10. Keep your Computer Systems and Staff current
Not only should you keep your staff up to date on internet practices. But make sure that your systems and antivirus software up to date. Many hacks into systems are cause by poor training and procedures. Hackers target computer systems that do not have the latest security patches. And having to tell your clients that you been hacked should give you that ‘Queasy Feeling.’
11. Keep your computer e-mail inbox clean
Even though you may receive a staggering amount of e-mails address e-mails as they come in. Using your inbox as a reminder or task list is just asking for trouble. Your inbox is not a substitute for your calendaring system.
12. Don’t Forget Mobile Device Security
That smartphone that you carry around everywhere is a powerful computer. But as a computer that is constantly linked to the internet, antivirus and strong passwords are necessary to protect this computer. A lost or stolen mobile device has serious ramifications. Make sure that if lost you can do a remote wipe of the data on the phone.
Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080