10. Working for an unscrupulous client. When you feel you need the business, you may be tempted to do work for clients whose ethics or reputation is questionable. On matters other than criminal law, you run the risk of your client's reputation being imputed to you...or worse. Unscrupulous clients will have no qualms about misusing your services and exposing you to situations that could lead to third parties alleging that you participated in your client's fraudulent or criminal activities. Apply a smell test, and don't be afraid to fire a client who tries to cheat other people.
9. Failure to document who you are not representing. It seems obvious who you are representing-the person paying you, of course. Unfortunately, it is not that easy. Third parties may arrange for another person's representation. If a person could reasonably believe you are their lawyer, you may have a duty to inform them of the true nature of your representation. Examples of persons who could become confused include: family members related to your client, business associates of your client, officers and employees of your client, and other unrepresented parties who are connected to the situation with which you are dealing. Telling such persons that they are not the client and following up with a letter is critical to avoiding claims.
8. Failure to document the scope of representation. Many types of legal matters have become entwined with the work of other professions. If you are working on a matter that involves other professionals or in which other professionals will be needed, document the type of work you will and will not do. For example, an accountant may be giving your client tax advice which is critical to the transaction you are working on. Clarify in writing that you have not and will not check the tax angles in such situations.
7. Leaving loose ends in personal injury settlements. We see a number of recurring problems with personal injury settlements. They can be caused either by oversight or ignorance, but we do find attorneys sometimes fostering an attitude in their clients that these matters can be ignored if no one raises the issues. Among the problems:
- Failing to settle hospital or public assistance liens
- Failing to get consent of the insurer when an uninsured or underinsured claim is settled
- Failing to settle workers compensation liens
- Based on our experience, we anticipate that some personal injury attorneys will have problems with changes in the tax laws regarding taxability of settlements. If you are unsure of the rules, review the new laws carefully or seek expert advice.
6. Representing both sides in a business transaction. Even good lawyers seem to fall into this trap. Why? The economics of the situation...it is just less expensive to have one lawyer do all of the paper work in a transaction. Simply getting a conflict "waiver" is not enough to assure that all will go well. If the waiver doesn't discuss the problem that ultimately arises, then there will be a question as to whether the attorney made a complete disclosure.
5. Failing to give the client a basis for making a cost/benefit analysis. "I didn't know it would cost that much..." are often the first words that a client utters before considering a malpractice suit. So many times the legal fees in a case outweigh the economic benefit that can reasonably be expected to be gained by the client. Are the risks of litigation worth the fees necessary? Does the client understand they could lose? Attorneys who get sued often simply do what the client requested: the client didn't understand that doing what was requested would cost so much with so little chance of success. If your client is suing on principle, consider whether they really can get what they really want from the lawsuit.
4. Taking a case that is beyond your expertise. We have seen malpractice cases arise from situations in which the attorney works on a transaction, and then litigates the problems that arise from the transaction. While some attorneys are good at both "office practice" and litigation, it is becoming more difficult to do both well, particularly in complex areas of the law. A prime example we have seen recently is in intellectual property practice. Some IP lawyers are brilliant technicians in drafting patent applications and licensing agreements, but they are not experienced, forceful litigators. Conversely, most top notch trial lawyers are not who you would want drafting those documents, but they can do a great job defending the documents against attack in court.
3. Failure to document the client's choice of an economic decision. Clients often decide that they cannot afford a course of action that the attorney suggests. For example, in divorce cases the cost of verifying the value of a spouse's business or of investigating the existence of "hidden" assets can be high. The best course of action is for the attorney to document by a letter the client's choice not to undertake such investigations. Otherwise, there may be a swearing match in court over whether the attorney advised the client follow a particular course of action.
2. Failing to sue the proper defendants in a timely manner. On numerous occasions we have seen failures by plaintiff's counsel to sue the proper parties prior to the expiration of statutes of limitations. The problem in many of these cases is not failure to calendar or to react to a calendar. These claims often result from procrastination: not investigating until close to the running of the statute, and then realizing that other parties should have been sued after it is too late. Among the types of situations we have seen recently: suing a passenger instead of a driver, suing the wrong corporation when there was one with a similar name. Early, thorough investigation will solve many of these problems.
1. Suing for fees. Suits for fees almost invariably draw counterclaims for malpractice. While most fee claims probably have some merit, fee claims pose risks that make them exercises in futility in many situations. If you sue for fees when collection is going to be difficult, you have wasted your time. If you sue when the client did not get what they hoped for despite your best efforts, a lay jury in your fee suit/malpractice case will not understand how hard you worked in the losing effort. The jury may think you not only messed up the case, but you are greedy, too. Even if you win, if you draw a counterclaim your insurance rates may rise based on expenses paid by the insurer and you will have to spend a good number of otherwise billable/productive hours on the fee suit. Avoid trouble on the front end: bill early and often so that you will know the client isn't going to pay early on and you can withdraw before you've invested too much time and effort.
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