Every lawyer’s worst nightmare is that a client will file an ethics complaint or malpractice claim against them. Many of the most common malpractice claims have nothing to do with the lawyer’s technical ability. Instead, they result from poor practice management. Most of these claims can be avoided by taking simple steps to ensure that the firm’s day to day operations run smoothly.
Earlier this week, Dustin Cole wrote a post on his blog, Res Ipsa Lawyer noting that of the top ten causes of malpractice and grievances, eight are due to what he calls “sloppy housekeeping.” His post is based on statistics he received from the Florida Bar Law Office Management Assistance Office, but they are similar to statistics I’ve seen elsewhere. His post lists the top 10 causes of malpractice as:
- Failure to manage time/procrastination
- Failure to docket – identify/document deadlines
- Failure to manage information
- Failure to obtain client consent
- Failure to file documents timely
- Missed or unresolved Conflict of Interest
- Poor communications with client
- Failure to follow client instructions
- Inadequate discovery/investigation
- Failure to know/apply the law
As you can see, only the last two deal with a lawyer’s technical skill or ability; the rest have to do with poor communication, disorganization, sloppy calendaring, lack of case or information management and an unrealistic workload, among other factors. These practice management issues result in either an inability to complete client work timely or failure to communicate with clients in a reasonable manner.
According to one malpractice insurer Chubb, “Good caseload management is a critical component of operating an efficient and profitable law firm. It also should result in fewer missed deadlines—a leading source of malpractice suits.”
Each jurisdiction has its own ethical and disciplinary rules that govern the conduct of lawyers practicing within that jurisdiction. In New York, the Rules of Professional Conduct, Rules 1.1 (Competence), 1.3 (Diligence) and 1.4 (Communication) are three of the rules that may seem simple, but can get lawyers into trouble if they fail to run their office properly. As Dustin Cole says in his post, “If you don’t have a daily handle on how many [open files you have in your office], what you’re currently doing in each, and the deadline for its completion – you could well be headed for the cliff.”
According to Dan Pinnington, practice management advisor for the Lawyer’s Professional Indemnity Company (LAWPRO) in Toronto, between 1997 and 2007, over 1/3 of malpractice claims were communications related, regardless of the size of the firm involved.
One of the biggest responsibilities of every lawyer – and the biggest sources of malpractice claims – is keeping clients up to date on their cases. Lawyers must not only keep clients informed, but also carefully and thoroughly document communications with clients throughout the engagement. That paper trail can significantly reduce malpractice risk. Here are a few things you can do:
- Communicate with clients regularly, even when nothing is happening on the matter
- Integrate client matters with your calendar and set automatic alerts reminding you to update the client
- If a file does begin to fall through the cracks, automatic reminders can help get it back on track
- Always confer with the client before taking significant steps on the matter
- Document the client’s agreement in writing to avoid claims that the client was unaware of or did not consent to the actions taken by the lawyer on the client’s behalf
- Communicate bad news to a client early; be up front about what happened and discuss how you should proceed in light of this new information
- Don’t delay bad news to avoid an uncomfortable conversation or attempt to ‘fix’ a mistake before the client finds out about it
- Keep all communications with a client in a centralized location
Pinnington also says that between 1997 and 2007, fully 17% of claims were specifically related to time management issues, and 5% to clerical issues.(See, The Biggest Malpractice Claims Risks, LawPRO Magazine, Summer 2008)
In the July/August 2010 issue of Law Practice, Pinnington wrote, “Are You At Risk? The Biggest Malpractice Claim Risks and How to Avoid Them,” in which he said:
“Taken together, administrative errors—which include tickler system errors, clerical and delegation errors, lost file or document errors, and procrastination—account for 28.5 percent of reported claims in the LPL studies.”
Earlier this year, Law Practice magazine ran another Pinnington article entitled, “Avoid a Malpractice Claim Using Time Management Tools” in which he cites failure to know or ascertain a deadline, failure to calendar, failure to procrastinate and failure to follow up as some of the main reasons why lawyers run into time management-related malpractice claims. The article provides 12 excellent tips for ways lawyers can avoid these types of claims by creating better systems within their practices.