Malpractice on Trial: Avoiding Claims

April 2018
Kathryn S. Whitlock, H. Lane Young, II
Defense Research Institute - The Voice, Volume 17 Issue 13

Every lawyer would like to retire without ever facing a legal malpractice claim. Unfortunately, that’s unlikely to happen for most lawyers today. In 1950, lawyers who entered the profession had an approximately 2 percent chance of being sued by a client; by 2000 that had risen to 95 percent.

This massive jump is due to several factors: in the 1980s, law school became the America graduate school of choice and law is a highly competitive business. The overpopulation and competition creates major pressure for lawyers to find clients and generate and collect fees, resulting in brutal work schedules, exhaustion, and errors. And for their hard work and dedication, lawyers are the most maligned professionals in America today. One internet search yielded more than 100 separate sites for lawyer jokes.

Dismal as that sounds, there are things that you can do to reduce your chances of being sued. Here is our top 10 list:

1. Perform conflict checks in every case.

2. Properly staff matters.

3. Communicate with your clients.

4. “Paper the file.”

5. Memorialize the relationship in writing.

6. Keep detailed time records.

7. Avoid suing clients for payment of fees.

8. Establish a workable docketing system.

9. Comply with applicable continuing legal education requirements.

10. Maintain adequate malpractice insurance.

We will take each item in turn below.

Perform Conflict Checks in Every Case

Create a system to check for conflicts of interest prior to accepting any new representation. For the system to work, all lawyers in your firm must maintain records regarding contact with clients and potential clients so that all conflict issues can be identified and addressed. A complete, documented conflicts check should be part of the mandatory procedure for setting up a new matter file.

Properly Staff Matters

Assuming that you have no conflict, make sure that you have the expertise for the matter: trials should be managed by trial lawyers, transactions by transactional lawyers, patents by patent lawyers, and so on. Do not take cases outside your area of expertise, even for a longtime client. And don’t take a case and then hand it off to someone else to handle. Confirm docketing of deadlines and maintain some level of participation in or communication with the lawyers working on the file as well as the client. No client wants to feel dumped.

Communicate with Your Clients

Each and every client that you have is your most important client, and every case that you have for them is important. Uninformed clients don’t feel that is true and are unhappy clients. Return clients’ calls and email inquiries promptly, and keep a record that you have done so. Send routine reports, even if you are not asked to.

Give a client written notice, in sufficient time for the client to consider and comment, any time that you plan to take action that affects the client’s rights. This includes settlement discussions, initiation and dismissals of actions, and execution of dispositive documents on behalf of a client.

If a client presents a complaint regarding representation, respond as quickly as possible, in writing, to address the concerns. Do not threaten to withdraw or take other action related to the representation unless no other alternative exists. Always offer to assist the client in obtaining replacement counsel, if the client so desires.

“Paper the File”

Having a good file makes it easier for you to remember everything that has happened in a matter, improving your effectiveness as a lawyer and assisting in your ability to explain conduct to a client, if necessary. Not to mention that plaintiffs’ legal malpractice lawyers relish the opportunity to point out the absence of documents in a file showing work performed, communications with clients, or confirmation of decisions made by clients.

Note, though, be circumspect in what you say in your notes in the file, memos, and emails. Consider how statements will sound if read to others years later after your client has requested and received your entire file.

Memorialize the Relationship in Writing

One of the most important pieces of paper in your file is the one showing the terms of representation. The scope of representation and the fee for it should be set out in a document for each new matter, even for the same client. Establish expectations at the onset of representation regarding billing practices. And confirm with your client, in writing, any agreements regarding changes in terms for payment of fees and billing rates.

Once you’ve finished your work for a client, terminate the representation in writing. You should do this for each separate matter that you have for a client. If you decline representation or terminate prior to resolution, you should notify the actual or would-be client in a writing that also sets out relevant deadlines that may affect the client's rights.

Keep Detailed Time Records

The importance of invoices and time records cannot be emphasized enough. They are often the best evidence that conversations and meetings occurred (or did not occur), particularly when a client does not take issue with them after receipt of a bill. Even if you are paid a flat or contingency fee, keep detailed time records reflecting the work that you do. Log the tasks that you perform and include enough detail to justify the time spent, the topics covered, and the decisions made.

Avoid Suing Clients for Payment of Fees

If you have established the relationship in writing and kept detailed records of your work, you will be in a much better position to prove the value of your work. You will need to do that if your client does not pay, because you need to be prepared to fend off a counterclaim for legal malpractice if you sue for fees. Nonpaying clients are infuriating, but step back and consider whether the potential to collect that money is worth the stress and lost time associated with defending a lawsuit alleging malpractice, breach of fiduciary duty, or worse.

Establish a Workable Docketing System

A clear system should be established for entering dates into the applicable calendaring system to ensure that all responsible persons are aware of all relevant dates. Case deadlines should be tracked by multiple people within your team to ensure that no dates are missed. And everyone on the team should know who is responsible for meeting which deadlines.

Comply with Applicable Continuing Legal Education Requirements

Ensure that you are up to date on all applicable continuing legal education requirements, preferably in areas relevant to your practice. In-house seminars are encouraged to educate new lawyers regarding procedures for conflict checks, establishing representation, and maintaining communication with clients.

Maintain Adequate Malpractice Insurance

The nature of your practice typically dictates the amounts and kind of malpractice insurance coverage needed, but consider carefully the various terms offered. Many carriers offer coverage for “claims repair” (fixing a problem before it becomes a claim), bar-grievance defense, and subpoena assistance. All of these coverages are designed to help avoid claims. Consider also who the insurer usually hires as defense counsel, along with the limit (which needs to be sufficient for a “worst-case scenario” for your most significant case), named insureds (which needs to be all lawyers doing work for your firm), and time limitations (ensure no gaps).

There is no way to guarantee that you won’t be sued or the subject of a claim, but following these top 10 make it more likely that you will be part of the “5 percent."

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