WHAT KEEPS YOU UP AT NIGHT?

Getting Peace of Mind In Your Law Practice

Thomas J. Watson

Will you ever have a malpractice claim?

Do you think you have ever committed malpractice?

Elements of malpractice

A. Lawyer-client relationship

B. Negligence

C. Proximate cause

D. Actual collectible damages

These are claims-made policies

What exactly does that mean?

What constitutes a claim?

A demand for money or services that relates to remedying the alleged wrong

When to report a claim

1. As early as possible – sometimes a matter can be “repaired” BEFORE it turns into a claim.

2. Failure to report a claim as required by the policy during the policy period may result in forfeiture of coverage.

What should be reported

Claim

Claim incident

Statute of Limitations

A. Six years B. Starts running:

1) When the negligence occurs, or

2) When the client knows or reasonably should discover that they have been

harmed.

Who’s making mistakes?

Newer lawyers (first five years of practice) – 10% of WILMIC claims

Lawyers in practice 15-20 years – 30% of WILMIC claims

Stay away from “dabbling” Dabbling is extremely risky. Why?

Approximately 40% of all claims involve areas of practice in which lawyers practice LESS than 10% of the time.

Less than 1% of all claims involve areas of practice in which lawyers practice 90-100% of the time.

Riskiest areas of practice 1. Plaintiffs’ Personal Injury

2. Real Estate

3. Business Organization

4. Estate, Trust & Probate

5. Bankruptcy & Collections

6. Family Law

Most common mistakes

1. Failure to know the law or properly apply it – 15% of all claims

2. Planning Errors in Choice of Procedure – 13% of all claims

3.Inadequate Discovery and Investigation – 12% of all claims

4. Client Communication – 12% of all claims

a) Failing to inform the client

b) Failing to obtain a client’s consent

c) Failing to follow a client’s instructions

5. Administrative procedures and calendaring – 24% of all claims

a) Failure to react in a timely manner to your calendar

b) Failure to know or ascertain the correct deadline

c) Failure to calendar properlyd) Procrastination

How do you avoid these mistakes?

Failure to know the law or properly apply it

Planning errors in choice of procedure Inadequate discovery and

investigation Client communication Administrative procedures and

calendaring

What Is Good Client Service?

1. Expertise in the matter2. Clear, written fee agreements and

engagement letters3. Regular status reports to the client4. Copies of correspondence related to the

case5. Prompt reply to inquiries6. Detailed and accurate billing

Before suing for fees, ask yourself seven questions…

1. Was the client pleased with the outcome?2. Are you critical of your own performance?3. Has an uninvolved attorney assessed your

representation?4. Is the amount at stake worth it?5. Is there an alternative to a lawsuit?6. How will your malpractice carrier see this?7. Would a judgment even be collectable?

Billing Policies

• Lawyer who did the work should always read the bill

• Important on-going communication tool with your client

• Be detailed and consistent

Effectively Utilizing Your Staff

1. Good staff people have case management skills* Opening and closing files* Preparing fee agreements, forms,

letters* Drafting correspondence,

pleadings, answers to interrogatories, etc.

2. Staff should handle some administrative procedures* Consider your strengths and

weaknesses* Shouldn’t staff be able to do

conflict checks, file management, etc.?

* Good training, avoid turnover

3. Client communication – good staff people can help

• Client selection – identifying difficult clients

• Staff contact with clients – seeing potential problems before you do

• Familiarity with your cases

• Understanding confidentiality rules

Dealing with pro se litigants

• Non-clients sometimes bring claims too

• More and more unrepresented parties

• Divorce cases in Dane County – 70% unrepresented

• Cautions when dealing with pro se parties

Limited Scope Representation (Unbundled Legal Services)

Limited scope representation is permitted in Wisconsin by the Rules of Professional Conduct

SCR 20:1.2(c) – “A lawyer may limit the scope of the

representation if the limitation is reasonable under the circumstances and the client gives informed consent.”

reasonable and informed

Reasonable?•Assisting a party with forms or providing brief consultation.

Unreasonable?•Trying to provide limited guidance on a matter involving complicated marital property and/or tax issues.

What is proper informed consent?

Supreme Court rule –

“An agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks and reasonably available alternatives to the proposed course of conduct.”

Best advice – define the representation specifically, in writing, and get the client’s confirmation in writing as well.

- Good way to document who is going to do what

- Give a copy to the client- Tailor them to your specific practice- Fill them out while the client is

present- Make sure you and your client each

have a signed copy

Use checklists

Limited scope representation should be in writing

It MUST be in writing if it is at least $1,000 in legal services. That’s true of any type of representation, limited or not.

Potential risk when taking limited scope cases

You may have a duty to advise a client of readily apparent and relevant information, even if it falls outside the scope of a limited representation, and to advise the client to seek independent advice, if appropriate.

Top Ten List of LSR Best Practices

1. Use good judgment

2. Document your file

3. Everything should be in writing

4. Educate your clients

5. Be careful not to “dabble”

6. Be wary of unrealistic expectations

7. Make sure representation is reasonable

8. Draft good fee agreements

9. Consider using checklists

10.Memorialize any changes in the scope of your representation

Disaster Recovery (Business Continuation Planning)

•93% of businesses that are without access to their data for more than 10 days file bankruptcy within one year of the disaster

•40% of businesses suffering a business interruption fail within five years of that interruption

Five reasons businesses get caught off guard when a business interruption hits

Denying a disaster could happen to you

Failure to do any disaster planning

Allowing yourself to be unaware of risks

Ignoring the warning signs

Relying on weak, untested plans

What could go wrong?

Serious illness, injury to, or death of a partner or associate

Natural disaster (flood, tornado, fire)

Technology failure (computer system crash, electrical storm damage, security breaches)

Results of down time

Loss of income and clients

Loss of future income or clients

Lost productivity, idle employee cost

Unanticipated business expense

Missed deadlines and appointments

What are your professional responsiblities?

Communicating with your clients

Diligent representation

Confidentiality

None of these cease in the event of a disaster.

So what should you do?

Prepare a business continuation plan

Establish procedures for evacuation, contacting employees and clients, re-opening your office, having alternative work sites, if necessary, and recovering files, calendars, records, etc.

Protect your electronic data (backup procedures, etc.)

Protect your paper files, scanning active and/or critical files, store off-site, if possible.

Review your property and other insurance coverage.

Review, update and test your plan regularly.