Respond the right way if faced with malpractice claims

For attorneys, being sued for legal malpractice can give rise to a host of emotions, ranging from embarrassment to guilt to anger. In an increasingly litigious society, lawsuits against attorneys have become commonplace to the point that it is more likely than not that attorneys will face either a malpractice claim or a bar grievance at some point in their careers.

Of course, not all attorneys who receive a malpractice claim have made a mistake that rises to the level of legal malpractice. Sometimes, a difficult client is looking to blame someone for an unfavorable result. Nonetheless, even a baseless claim can have harmful consequences for attorneys including, at a minimum, the time and expense of defending the claim.

Worse yet, a frivolous claim can turn into a much more serious problem if not handled promptly and properly. As a result, it is helpful for attorneys and law firms to have procedures in place for handling malpractice claims or potential claims. Below are some steps for attorneys to consider when they find themselves on the receiving end of malpractice claims.

Provide Notice to the Insurer

Attorneys pay insurance premiums for a reason. After paying any applicable deductible, attorneys often rely on their insurers to protect them by paying reasonable defense costs and any judgment associated with the legal malpractice claim. No attorney wants to jeopardize that coverage by failing to comply with the terms of the policy.

In particular, legal malpractice insurance policies typically have specific provisions regarding providing notice of a legal malpractice claim. For many reasons, it is helpful for attorneys to review their insurance policy every year so that they know exactly how to report a claim if one arises. Unfortunately, many attorneys are not aware exactly when and how to report a claim to their insurer until it is too late.

After providing notice, the insurer will typically send the attorney a letter acknowledging receipt of the claim that specifies a claim number to be included on all future communications. Generally, attorneys may want to follow up with the insurer if the acknowledgement letter is not received within 72 hours.

Consider When to Retain Outside Counsel

As the old saying goes, a lawyer who represents himself has a fool for a client. This can be especially true when it comes to responding to a legal malpractice claim. As noted above, attorneys tend to react to a legal malpractice claim differently than another claim they might handle on behalf of a client. Thus, attorneys can have their judgment clouded regarding the appropriate way to respond.

Instead, most attorneys who have received a direct claim will let someone else at their firm -- such as the general counsel -- assume responsibility for reviewing and responding to the claim. If a lawsuit has already been filed, the firm will typically want to retain outside counsel as soon as possible.

Under many insurance policies, the legal malpractice insurer will retain counsel to defend the claim, sometimes subject to a reservation of rights under the legal malpractice insurance policy. Subject to any relevant terms in the policy, the attorney and law firm can discuss any concerns regarding the selected counsel with the insurer.

Consider Opening a Segregated File

Clients are typically entitled to the return of their file, which sounds simple enough. However, in malpractice claims, the question of what constitutes the client's "file" can be a major source of discovery disputes.

To avoid messy disagreements, it is helpful for the law firm to consider segregating information relating to the defense of the legal malpractice claim into a file that is distinct from the file relating to the client matter at issue in the claim. This segregated file can include any notes or other work product generated among law practice members in response to the legal malpractice claim. Thus, such materials are more likely to be viewed as the property of the law firm, and not of the aggrieved client.

Many firms will also take steps to remind attorneys to bill time spent in defending the claim to a separate client/matter number to avoid any risk that confidential malpractice defense activity might appear on a client bill. The legal malpractice claim can be treated as a completely new matter with separate correspondence, pleadings, and related materials.

Remember to Be the Client

When a claim arises, attorneys by nature immediately start thinking of possible legal solutions. However, when the claim concerns the attorneys' own conduct, attorneys often forget to let their attorney do the work of defending them. Not only can an attorney's personal interest affect her or his judgment, but attorneys with little to no experience in legal malpractice law can end up creating more problems than they solve when they try to take an active role in the defense of their claim.

Instead, it is helpful to remember that the legal malpractice insurer, defense counsel, and the firm all have the same goal of favorably resolving the claim. Rather than let the claim become a constant obsession or concern, the most productive use of the attorney's time is typically to focus on her or his law practice.

Moreover, although the receipt of a claim can be traumatic, attorneys can find comfort in the fact that a substantial percentage of claims result in no payment made on behalf of the attorney or only a small payment. Indeed, by recognizing that claims are an inevitable reality of the practice of law today and by having a process in place for handling claims when they rise, attorneys can limit both the emotional and financial impact of legal malpractice claims.