10 Common Mistakes That Can Lead to Legal Malpractice Claims and How to Avoid ThemInsurance Explained
Table of Contents
- Missed Deadlines
- Misuse of Finances
- Inadequate Investigation or Discovery
- Errors in Communication
- Failure to Know and/or Apply the Law
- Lack of Consent
- Failure to Follow Instructions
- Errors in Strategy or Planning
- Conflict Of Interest
- Tips for Avoiding Legal Malpractice Claims
As is the case with every regulated profession, a career in law demands a very high degree of professional care. Any time an attorney fails to meet the expected standards of his or her profession, their clients could take legal actions against them for what is called “legal malpractice.”
Legal malpractice claims most often occur when a professional decision or action made by an attorney results in losses for his or her clients, who will then seek to recover these losses by way of a legal malpractice action.
While it’s true that not every mistake that an attorney makes can be considered grounds for legal malpractice actions, it’s also true that many very common professional mistakes affecting nearly every area of the law regularly lead to professional liability claims.
Let’s take a look at not only some of the common ways in which lawyers can slip up professionally that could lead to legal malpractice claims but also what attorneys can do to minimize these common mistakes and their chances of being sued.
Cases of missed deadlines in the legal profession are most commonly linked to attorneys failing to file documents in time. There are several deadlines that need to be met whenever attorneys have to file court documents and failing to meet these deadlines can have negative consequences for their clients and, in turn, themselves.
When an attorney fails to file documents on time, their clients can lose significant amounts of money, not to mention that in some instances, failing to file documents in time can lead to a case being thrown out of court entirely.
Another common mistake that’s related to deadlines is often referred to as a “failure to calendar” properly. This means that the attorney may have been aware of certain deadlines but failed to schedule them for some reason. This can lead to missed hearings, missing documents, and consequentially, sometimes leads to a default judgment against the client.
Misuse of Finances
When a client pays a retainer, their attorney must put that money into a trust account. If the attorney puts this money into his or her personal account, this can be considered financial misuse. Of course, the most extreme example of legal malpractice related to a misuse of funds would be of an attorney were to steal funds from their clients outright.
Inadequate Investigation or Discovery
One professional responsibility all lawyers take on when they agree to take a case is to put in the proper amount of time and effort investigating their clients’ legal actions. This phase of the legal process is referred to as “discovery,” which is a series of legal mechanisms that attorneys use to put together evidence that will help their clients’ cases. If an attorney does not perform a sufficient investigation and fails to discover facts that are important to a particular case – such as failing to identify a key witness – they could be liable for legal malpractice.
Errors in Communication
Communication is a very important part of the lawyer-client relationship and poor communication is one of the main reasons why clients take their attorneys to court. If an attorney is not returning their clients’ calls and cannot show evidence as to why the lack of communication was warranted, a claim could be filed against them.
Failure to inform is one of the most common reasons for legal malpractice claims. This means that the attorney, for whatever reason, did not provide information to his or her client that was considered relevant or important to a case.
Failure to Know and/or Apply the Law
Obviously, lawyers are expected to have a working understanding of all pertinent areas of law in which they are practicing and the know-how to apply the law correctly. If the attorney doesn’t apply a law correctly, misunderstands it, or fails to keep up with changes that have been made to laws within his or her jurisdiction, a legal malpractice claim could be on its way.
Lack of Consent
While attorneys are hired by clients to represent them in legal matters, that doesn’t mean that they receive carte blanche when it comes to decision making. A lawyer must always have the consent of the client before taking any legal action.
In the relationship between client and attorney, the clients outline their objectives while the attorneys put together a strategy that they believe will allow these objectives to be reached. However, the attorney cannot proceed with his or her strategy if the client does not consent to it. Any time an attorney acts legally without the expressed written or verbal consent of a client, that attorney opens himself or herself up to a potential legal malpractice claim.
This one is fairly clear cut. If an attorney deceives the client or anyone else involved in a legal process in order to obtain unlawful gain, there’s a good chance that they have committed fraud. If a client has any reason to believe that something like this occurred, he or she can file a legal malpractice claim against the attorney.
Failure to Follow Instructions
Similar to taking legal action without the consent of a client, lawyers can also be accused of legal malpractice if they refuse to follow instructions given by their clients. At the end of the day, the client is paying the attorney for legal representation and the attorney is obligated to follow instructions. If the attorney believes that it would not be beneficial to carry out these wishes, they may say so, but they cannot refuse to follow instructions if the client has made up his or her mind and instructed them which course of legal action they would like to take.
Errors in Strategy or Planning
If a choice of strategy or improper planning leads to losses suffered by the client, an attorney can be liable for professional negligence. Errors related to strategy and planning are generally looked at as errors in judgment regarding how a client’s legal matter should have been handled.
Conflict Of Interest
The definition of “conflict of interest” is pretty straightforward. If an attorney puts his or her interests ahead of the clients’ interests, that constitutes a conflict in interest. Additionally, putting one client’s interests above another client’s interests can also be considered to be a conflict of interest and an example of legal malpractice.
There are many different examples of conflict of interest; failure to provide full disclosure, having a personal relationship with a member of the opposing party (client or attorney), intentional professional misconduct of any kind, representing two parties on the same side of a dispute that have conflicting interests between themselves, working for a percentage of a client’s business transactions instead of a regular professional fee, and so on.
Tips for Avoiding Legal Malpractice Claims
As a legal professional, it is the attorney’s duty to protect the best interests of his or her clients. However, it’s also important to not lose sight of the fact that attorneys must take the task of protecting themselves just as seriously.
Here are some best practices that legal professionals can follow in order to both minimize the chances of being sued for legal malpractice but also protect themselves and their assets in the event that a professional liability claim is filed against them.
Be Selective with Cases
One of the best ways to steer clear from legal malpractice claims is to make sure to avoid cases that appear to be problematic and risky. Identifying which cases pose unique problems is a complicated process, but a necessary one. First and foremost, attorneys must speak very openly with their potential clients and get them to be open and transparent as well in order to put together realistic expectations and goals for the matter.
It’s important to make sure that the client is dedicated to investing the time and money that will be needed in order for the attorney to put together and implement an effective case for them.
Also, legal malpractice claims very commonly arise from attorneys taking on cases related to areas of the law in which they are not experts. As an attorney, it is also important to assess your skills, knowledge, and strengths before agreeing to take on a claim. If the case that is being presented falls outside of the attorney’s expertise, they should respectfully decline the case and do so in writing by presenting what is referred to as a “non-engagement” letter to make sure that their decision to not participate in the case has been documented.
Consult Other Attorneys
Even when an attorney stays committed to taking on cases that fully fall within the parameters of his or her expertise, there will also be issues with which they might not be completely familiar. In order to avoid errors in judgment or strategic miscues, it can’t hurt to consult a knowledgeable colleague when necessary.
When an attorney recruits another set of expert eyes to help review the facts and possible outcomes of the case, they are helping themselves to make sounder decisions, create stronger plans, and avoid errors that can lead to professional liability claims.
It’s also a good idea to outright refer cases to other attorneys if the cases deal with an area in which you are not familiar. While it might seem unwise to turn down cases, referring them to other attorneys allows lawyers to build strong relationships and networks with other legal professionals who will then return the favor when they come across a case for which they believe others to be better suited.
Always Have a Contract
This is an obvious one but should be stated regardless. Attorneys should never provide services to a client without first putting in writing what their core services consist of and include. Naturally, this contract should include all the most pertinent information, including the terms of services, the retainer, and a clear definition of what the attorney has obligated himself or herself to do under the retainment.
Set Proper Expectations
Having a strong and open relationship with the client is vital. In order to facilitate a good professional relationship, the attorney must always strive to set and maintain realistic expectations with the client. It’s very important to maintain honesty in communication, especially when discussing the range of outcomes that are possible for each particular case. Attorneys should always be prepared to discuss with their clients both the best and worst-case scenarios, as well as anything that falls in between the two outcomes.
It is also incredibly important for attorneys to never give guarantees to their clients and to temper expectations, especially in terms of the prospective value of the case. The potential value of a claim is very difficult to estimate accurately, most of the time, which is – once again – why no guarantees should be made to clients.
Maintain Meticulous Documentation
Obviously, it’s nearly impossible to document every single detail of a case, but it’s still incredibly important to document everything possible. Every interaction with a client needs to be documented in order to both avoid malpractice claims and reduce the legal consequences if one arises.
Making sure to keep meticulous records with emails, and time-stamped notes, documents, and even audio recordings of conversations is imperative, especially when attorneys discuss very sensitive information or give advice related to potentially drastic situations and legal outcomes.
Chances are that a client could misinterpret something that was said, especially if legal jargon was involved, which is why it’s good for attorneys to have documentation that can prove exactly what was being said and recommended to their clients at all times.
Even if an attorney is incredibly careful, legal malpractice claims are filed all the time and practically cannot be avoided over the course of any legal career. That’s why every attorney and law firm needs to have legal malpractice insurance, to protect themselves from the inevitable scenario of having to cover costs related to a claim made against the attorney or law firm.
If you’re interested in purchasing lawyer liability insurance, be sure to carefully review all terms and protective benefits before buying your policy. And if you have any questions, don’t hesitate to reach out to the expert brokers from our law practice who are standing by to help you find the right coverage for the best price with Embroker.
Whether you are an independent lawyer or a 50-person practice, the first step to putting together a quality risk management plan is understanding the potential risks your law firm faces.