Lowering Legal Malpractice Exposure
Several legal malpractice claims share typical allegations/themes that may be avoided if law firms have the appropriate danger management measures in place. Implementation and maintained use of some extremely rudimentary systems and procedures can lessen the likelihood of being sued, or inside the event you are sued, can bolster your defense. Beneath are some standard guidelines law firms can utilize to help reduce their legal malpractice exposure.
Engagement Letters – Legal malpractice claims typically hinge on whether or not the claimant can establish that they were a client with the attorney (or at least owed a duty of care in 3rd celebration claims) and that the lawyer agreed to manage the matter in query. A written engagement letter ready for every single client or possible client can serve to establish the facts from the lawyer-client agreement. Ideally an engagement letter would include the following:
Name of client
Scope of services (and in certain circumstances specifying what services aren’t becoming performed/included can also be proper)
Fee quantity and billing schedule, including payment expectations
Identification of any possible conflicts of interest
Name and contact details of major lawyer handling the matter like outline of firm’s communication guidelines (i.e. timeframes for responses to telephone calls, faxes, letters, and so on.)
Client’s obligations for the attorney and/or firm
Dispute resolution technique and initiation process
Non-Engagement/Declination Letters – They are often the distinction in getting a meritless claim dismissed. As important as engagement letters are, non-engagement/declination letters are equally crucial. Written documentation towards the former prospective client advising which you won’t be representing them is important in establishing that no skilled partnership existed. Non-Engagement/Declination letters really should incorporate the following:
Name of prospective client
Date the attorney and/or firm met with prospective client to discuss representation
Details of the potential case which had been discussed
Statement obviously advising the potential client of the attorney’s/firm’s decision not to accept the situation
Disengagement Letters – Different circumstances may arise that prompt a severing of the specialist relationship in between a lawyer and client. This frequently occurs ahead of the matter for which the attorney was hired has reached a final resolution. In such circumstances it is important the disengagement be documented in a letter towards the client. When the client subsequently hires new counsel who tends to make an error, the disengagement letter might be the most effective defense to establish who the accountable lawyer was in the time the error occurred. Disengagement letters should incorporate the following:
Name of client
Date the attorney and/or firm are terminating their representation in the client
Statement obviously advising the client of the attorney’s/firm’s purpose for disengagement (i.e. situation concluded, client request, non-payment of fees, and so forth)
Successor counsel: if identified include their name, if not include a statement advising client to seek new counsel
Specialist Liability Insurance – Constant use in the letters described above may help you decrease the possibility of being named inside a malpractice suit, however they won’t get rid of the possibility of claims. Lawyers specialist liability insurance won’t eradicate claims either, but it can serve to lessen the impact a malpractice claim may possibly have on your firm.
When deciding whether or not to carry expert liability insurance, think about the following:
Frequency of client claims and malpractice law suits are on the rise. The National Law Journal has reported that an lawyer can now count on to be sued a minimum of as soon as in the course of their profession.
Defending a malpractice claim is high-priced. History tells us that roughly 35% of loss payments in professional liability claims are due to litigation costs, so even when you prevail together with your defense it will be costly.
Your personal assets may be at risk with no proper professional liability insurance in spot.
Many clientele, especially larger companies, are now requiring proof of specialist liability insurance ahead of they are going to enter into an engagement.
Many, if not most, referral services demand the attorney or firm have specialist liability insurance in place ahead of they’ll begin referring cases.
Some states and jurisdictions now require that you just disclose to clientele whether or not or not skilled liability insurance coverage is in place.
In case you are a little or mid-sized law firm which has experienced difficulty discovering lawyers professional liability insurance on account of paid claims or disciplinary actions, DefenseProSM Lawyers Expert Liability may be in a position to help. Administered by Lockton Danger Services, a subsidiary of Kansas City-based Lockton Organizations, the biggest independently-owned commercial insurance coverage broker in the United states, DefenseProSM is particularly developed to meet the specialist liability needs of distressed law firms. For far more info, pay a visit to the DefenseProSM web site at http://www.defenseproliability.com.
DISCLAIMER: The info within this report is offered for general discussion purposes only, and does not constitute legal guidance. For particular guidance contact your own personal legal, financial, insurance coverage and/or other advisor.
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