History has shown that stressful economic times leads to a higher number of legal malpractice claims. For example, following the 2008 recession, legal malpractice claims in the U.S. rose sharply. Theories abound as to why this is the case. Reasons for a recent increase may include changes to court rules and procedures related to COVID, which can lead to missed deadlines or other errors for the uninformed practitioner; remote working arrangements, which can potentially lessen meaningful collaboration with colleagues or clients; or constrained client budgets, which can lead to clients pushing you to do more with less with respect to time spent on research or investigation.
Whatever the reason, it seems to hold true that when clients feel economic pressure, they look for ways to recoup their money. Unfortunately, this may mean clients are more inclined to bring a legal malpractice claim.
Safeguarding Against Legal Malpractice Claims
However, there are steps lawyers can take to safeguard against legal malpractice claims, not only in today’s harsh economic climate, but at any time throughout their career. These tips are worth repeating because the vast majority of claims stem from errors related to missing deadlines, conflicts of interest, dabbling in areas outside of your normal practice, and clients not having clear expectations of your role. Therefore, keep these tips in mind:
- Be Extra Cognizant of Deadlines. Failing to timely file a lawsuit or other pleading continues to make up a large portion of legal malpractice claims. If possible, try to avoid filing a lawsuit on the day the statute runs if it could be filed earlier. You never know if something unexpected could prevent you from making it to the courthouse on time (car trouble, traffic, etc.). If you find yourself procrastinating on moving a case along for various reasons (you have become too busy, the facts have developed differently, etc.), you may consider referring the case to an attorney who can better serve the client. Additionally, make sure your client is aware of the deadlines and the importance of complying with said deadlines. For instance, if you need your client to answer discovery by “x” date, make sure you tell the client “x” date and what could happen if discovery is not answered by “x” date.
- Double and Triple Check for Conflicts. Everyone knows there should be a method for screening conflicts in your office. It is important to be as objective as possible when screening, and if there is a chance your representation of a client could be negatively impacted by a duty to another conflict, you should decline the representation. However, just because a conflict does not exist at the outset of the representation does not mean that a conflict will not arise in the future, especially if there has been corporate restructuring or changes in the allegations in a given case. Be vigilant about regularly assessing for conflicts.
- Choose New Clients Carefully. Do not accept a new matter without carefully considering whether you can competently handle the work. Our statistics have shown claims typically arise in an area of practice that is different from the lawyer’s stated “main” area of practice. Also, consider whether a potential client has alleged malpractice claims against previous lawyers or displayed questionable business or litigation conduct in the past. Declining representation in the above scenarios may avoid an expensive liability down the line.
- Clearly Define the Scope of Work. Ensure that the scope of work is clearly defined in your engagement letter. When a matter goes south, affected parties tend to blame the lawyer. Often, especially in transactions, we hear “Well he/she was the lawyer for the deal.” It is difficult for juries to understand that different lawyers specialize in different things, and not all lawyers have an attorney/client relationship with all parties to a transaction. To guard against this, make sure your engagement letter is explicit about the tasks you will complete. If additional tasks arise during the course of your representation that are outside of the original scope of representation, discuss and document these issues with your client.
It’s always a good time to be vigilant about avoiding legal malpractice claims. With fears of a recession looming, clients may use any opportunity to find fault with your work. While it is impossible to know exactly what the legal malpractice landscape will look like in the coming years, we can expect there to be an uptick in malpractice litigation. Some reasons for this uptick are generally beyond our control, but avoiding the common pitfalls are prime safeguards in legal malpractice prevention.