Top 10 Ways to Avoid Legal Malpractice

Malpractice is not inevitable. In most cases, it can be prevented with a little common sense. Veteran professional malpractice attorney Randy Johnston tells how to know when you are dangerously close to committing malpractice and how to pull back from where the ice is thin. These 10 rules can avoid your firm the embarrassment and expense of a legal malpractice claim.

1. Ignore your calendar and do everything early
Missing deadlines is the most common source of lawyer malpractice. This can result from just not knowing the deadline – or thinking you do, but being wrong. Some deadlines are well known, but many are not. It might be the seven-year deadline for the maintenance fee on a patent, the ten-year deadline to renew a judgment, or a one year statute of limitations on an out-of-state tort claim. Waiting to the last minute to do something is far worse than forgetting a deadline. Letting the deadline dictate when you do something encourages a sloppy way of thinking and acting. You are then driven to meet deadlines, instead of your client’s best interests.  Form a habit of acting before deadlines, not on them.

2. Know who your client is
Imagine that you are a transactional lawyer sitting across from two people setting up a company. The result is a limited partnership in which the individuals are limited partners and a limited liability company (LLC) is created with each partner having his own LLC as an owner of the general partner LLC. With all of these entities involved, who is your client? Remember, 90% of all new business ventures fail. Sooner or later, a dispute will develop between business partners and the lawyer’s paperwork will probably help one of them over the other. When that happens, it is critical to know who the client was, since only the client can sue for malpractice, and to have all your paperwork reflect that fact. Even if you are clear that you represent only the limited partnership (for example), you must be diligent about not letting that line erode over time as you consult with the limited partners independently about various issues that are important to them.

3. One client per lawsuit
One of the best ways to get sued is to represent more than one client on the same matter. With more than one client, you risk one client thinking you favored the other at his/her expense. Disputes arise from situations as simple as a husband and wife hiring you to sue over damages to their child. When 50 percent of all marriages end in divorce, there is a 50/50 chance you will end up with at least one unhappy with the other and you in the middle. That unhappiness can be transferred easily to you. There are situations where we all represent two or more clients. We should not, however, treat those situations the same as we do when we have only one client. Disclosures are different, pressures are different, reporting obligations are different. Skate out if you must, but know the ice is thin and act accordingly.

4. Don’t sue your client for fees
If you don’t want a lawsuit with your client, don’t file a lawsuit against your client. A legal malpractice claim is a compulsory counterclaim to your suit for fees. Once you sue for fees, the client is forced to review your file with a magnifying glass, looking for every possible mistake that can be twisted and tortured into a claim for malpractice. An act that might be a very bad malpractice case could be a very good counterclaim. Some insurance companies are exempting coverage from all malpractice filed as a counterclaim to your lawsuit for fees. Combine that with the cost of paying your deductible and a possible higher insurance premium and it is seldom worth the risk to sue your client for fees owed.

5. Admit your mistakes
Not only do the ethical rules require you to disclose any mistake that threatens the client’s interest, your own self preservation instinct should lead you to do the same thing. Just as doctors are learning they can avoid malpractice claims by admitting mistakes and apologizing, lawyers are learning the same thing. Be careful what you say and consult with your personal attorney first, since you don’t want to jeopardize your insurance coverage, but you can often avoid a lawsuit by doing the ethical thing and admitting your mistake to the client rather than engaging in a cover up.

6. Refer business out
With the current economy, there are lawyers who are keeping business they once referred to a specialist. By definition, this means they are handling matters in areas of the law in which they are not an expert. Do not let the bad economy push you into areas of law where you are more likely to make mistakes. Read a book and wait for the business you know.

7. Don’t practice hand grenade law
“Hand grenade law” is that type of law practice where you don’t worry about hitting the target. You just try to throw something close enough to do the job. We all know when we are practicing “hand grenade law” because it leaves us with that feeling in the pit of our stomach, wondering if our actions are good enough. The problem is, hand grenade law often works, so it fools us into thinking we can to it without risk. But it like Russian Roulette, it always catches up with us. When you have that feeling, slow down, sit down, take a deep breath, then check it out, and put your legal cross hairs right on the client’s problem and pull the trigger: do not just lob a hand grenade close to it.

8. Choose less money
Despite all of our careful planning and best efforts, we will all come to that moment where we are staring at some unanticipated ethical dilemma with little time to research the proper path. Years ago, I developed a general rule for handling circumstances where I didn’t have time to fully research the issue. If I just picked the road that netted me less money, I was usually making the appropriate ethical decision.

9. Care about your client
Remember, doctors started getting sued when they stopped making house calls. Lawyers started getting sued when the practice of law became more of a business than a profession. If your clients are nothing more than a means to acquire a Porsche or a mountain cabin, expect to be sued.

10. Maintain good malpractice insurance
Not only is insurance coverage there to help you if you do get sued, the insurance companies typically have attorneys who can often advise you on specific situations to prevent a lawsuit from ever being filed. Why would you not want that!

Okay, that is my Top Ten List. Any one of these rules could be its own extended topic and could prevent you from making the mistake of your career.

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