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How to Manage the Risks Associated with Substantive Errors

The American Bar Association Standing Committee on Lawyers’ Professional Liability has been providing a statistical analysis of claims data collected from various lawyer-owned and commercial insurance companies for years. One number that I consistently pay attention to has been the number of claims that arise as a result of a substantive error. While this number has varied a bit, it generally seems to hover around 46%. In short, this means that roughly 46% of reported claims in any given year are a result of an attorney failing to know the law, failing to properly apply the law, or failing to know or ascertain a deadline. This category also includes missteps such as inadequate discovery or investigation, a conflict of interest, a planning error, a failure to understand or anticipate tax consequences, and an error in a search of the public records. From a risk management perspective these kinds of errors are more difficult to address because they arise out of an attorney’s abilities, or lack thereof, as opposed to being a problem with a firm practice or procedure. While a risk manager can help an attorney develop a more effective calendaring system or tighten up file documentation, it is far more difficult to discuss and address what in reality is often simply bad lawyering. That said, here are a few suggestions that if taken to heart can help reduce the risk of these types of claims.

The first and most important practice tip I can share is one you probably have heard before. Don’t dabble! Truly, there is no such thing as a simple will, simple personal injury matter, or simple contract. For example, what looks to be a simple contract may in reality be a trap due to a lack of awareness of a unique local law that significantly affects the contract’s terms. By the way, this example was an actual case we handled years ago that resulted in a loss payout. In truth the dabbler doesn’t know what he doesn’t know and therein lies the problem. If any client or prospective client asks you to do work that is beyond your comfort zone or outside of the areas in which you regularly practice, caution is in order. If you feel you must accept it, only do so if you are willing to seek guidance from an attorney knowledgeable in the practice area to ensure that you adequately and appropriately address the matter.

Prioritize CLE. I see this over and over again, attorneys attend whatever CLE is available when their reporting period is about to expire. They’re going through the motions to get the credit and seem not to care that the program has no relevance to their practice. Who hasn’t witnessed fellow attendees doing something other than staying focused on the CLE presentation? I have watched attorneys browse the Internet, catch up on work, take naps, and even check in and then spend the bulk of the event outside of the meeting room. In fact, a few years back I witnessed someone check into an event with golf clubs in hand. He signed in, picked up the materials and then headed out for 18 holes. With alternative formats such as videos, teleconferences, and web presentations, it’s even easier to pay only half-hearted attention. The better approach would be to take CLE that is relevant to your practice area. Seek out quality programs and try to get as much from the experience as possible. Stay attentive, ask questions, and read the supplemental materials after the program has ended. CLE can be an effective way to stay current on major developments in your principal areas of practice if you invest in the process. One side note here, don’t minimize the value of any educational opportunities that focus on improving your research and legal writing skills. Trust me; there are more than a few of us who could greatly benefit from these types of programs.

Here’s one that catches a lot of attorneys. Don’t fall into the trap of thinking that because the work is really only a legal favor for a friend, family member, or staff member that it’s okay to not give it your all. Wrong. There is no such thing as “light advice” when it comes to your performance. Favor or not, this is real legal work and you will be held accountable for the outcome.

Prioritize you own health and well-being as a way to stay sharp and focused because shoddy work is shoddy for a reason. For example, if you invest little or no time pursuing personal interests or taking vacations because your workload is beyond reasonable your energy level and performance will suffer. Mistakes are more likely to happen when you are tired, the work has become mundane because it’s all you do, or burnout has started to enter the picture. For similar reasons, don’t minimize the importance of nurturing the important personal relationships in your life. If these relationships are neglected for too long the support systems they represent may not be there when you most need them, which can also lead to serious performance short comings down the road.

Finally, think about the recent changes to the Rules of Professional Conduct in a number of jurisdictions around the country. The rules that discuss competency and confidentiality have had language added either to the rule itself or to the rule’s comments that in short mandates an understanding of technology, hardware and software alike. We are to have a working knowledge of the benefits and risks associated with relevant technology. And I would add this: For all technology we do use, we are to act competently to prevent the unauthorized access to our client’s digital information as well as to prevent the unauthorized or inadvertent disclosure of the same.

These rule changes mean that a lawyer must know when and how to use the Internet for research when called for—and I’m not talking about using Westlaw or Fastcase. I’m talking about using the social media space. I don’t know about you, but I call failing to do so in appropriate situations inadequate discovery and investigation. You simply cannot decide to never go there, not anymore. By the same token, one must have an understanding of the basics of e-discovery because clients can be seriously harmed if data is mishandled or if clients are never even informed of the options available to them. You see, while insurance companies can be slow in changing how they categorize malpractice missteps, how these missteps occur is changing quite rapidly and it’s all about the technology. Take these rule changes to heart because not doing so is failing to manage the very risks we’ve been discussing, risks that account for 46% of the claims that arise year after year.

Related Posts:

Why You Should Never Say Never to Malpractice Insurance -The True Cost of “Going Bare”

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As a Risk Manager for ALPS, Mark Bassingthwaighte. Esq. is responsible for developing and delivering new risk management and CLE products and services, risk management consulting, law firm risk evaluations, and writing content for the ALPS 411 blog at: www.alps411.com. In his tenure with the company, Mark has conducted over 1,000 law firm risk management assessment visits, presented numerous continuing legal education seminars throughout the United States and written extensively on risk management and technology. Mark received his J.D. from Drake Law School. He can be contacted at: mbass@alpsnet.com

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