Avoiding Malpractice: Say Hello Slowly, Goodbye Quickly, and Tread Carefully into New Practice Areas
by Edith R. Matthai
(County Bar Update, October 2004, Vol. 24, No. 9)

 

Avoiding Malpractice: Say Hello Slowly, Goodbye Quickly, and Tread Carefully into New Practice Areas

 

By Edith R. Matthai at the request of the Law Practice Management Section Executive Committee. Matthai, of Robie and Matthai, focuses her practice on representation of lawyers in professional malpractice matters, and is the president-elect of the Los Angeles County Bar Association. The opinions expressed are her own.

 

With malpractice insurance rates continuing to escalate, attorneys must become proactive risk managers. A single claim, even one without merit, can dramatically increase insurance costs. The first mandate is to select clients carefully. The second is to act quickly once counsel realizes that the relationship has soured or that the information provided by the client was false. The third is to act with great care if venturing into areas in which counsel has limited knowledge.

 

Conducting due diligence before undertaking the representation is essential. Do not ignore obvious red flags when the client has had multiple prior attorneys, a litigious history, or balks at the prospect of paying. Too often, softhearted counsel are persuaded that they should “come to the rescue” of a potential client who tells tales of abuse by previous lawyers. Many who believed that they would be able to satisfy the client find themselves in the clutches of a “user and abuser” who is satisfied only by transferring complaints to new counsel. Many lawyers have allowed themselves to believe that the litigious client will not turn on them. Those lawyers are likely to be referred to ultimately as “defendants.” Clients who do not meet obligations for fees are not likely to uphold other obligations as clients, and are simply not worth the risk of a malpractice suit.

 

Many sleepless nights and potential suits could be avoided if attorneys move quickly to terminate a poor relationship. Defendants in malpractice actions often explain that they did not withdraw because they believed if they just did a little more for the client, the relationship would improve. Others believe that if they can bring the matter to a successful conclusion, they will be done with that client. They vow to “never make the same mistake again.” The genesis of this approach is usually a combination of the laudatory desire to serve the client and a desire to avoid confrontation. However, some clients simply cannot be satisfied, and if the anticipated successful result is not achieved, the lawyer will become the target. If counsel acts quickly, the client can be discharged; the greater the delay, the more likely that counsel will be trapped since withdrawal will prejudice the client’s interests. Once the relationship has soured, correspondence with even the most difficult client must remain professional. The letter written in a fit of frustration may be shown to a jury, which may conclude that the lack of professionalism demonstrated by the letter is proof of the plaintiff’s assertions of mistreatment.

 

When lawyers venture outside their regular practice areas, they must make certain that they immediately learn the field. Delay can cause the loss of valuable rights. Since many areas have customary procedures not delineated in the books, it is the best practice to consult with an attorney proficient in the field. Most practitioners are generous with informal consulting time; in a complex area, the price for retention of a consultant will be far less expensive than the consequences of a malpractice suit.

 

Even if you have done nothing improper, you may find yourself on the receiving end of a malpractice action. Thus, part of the risk management equation is in the structure of the firm. When properly formed and maintained, limited liability partnerships and corporate structure can prevent exposure beyond insurance limits. Attorneys practicing together should agree in advance whether deductible expense and increased premium cost will be shared or will be charged to the handling attorney. If not agreed to in advance, the question will be raised at the worst of times -- after the claim when the temptation of finger pointing is far too strong.

 

To avoid the personal and economic consequences of malpractice actions, counsel must practice with the recognition that they are potential defendants and be proactive in protecting their own interests while, nevertheless, upholding the traditions of service to those clients who should be served.

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