An Attorney’s Nightmare - Plaintiff and Defense Perspectives on Legal Malpractice
Editor’s Note: A legal malpractice suit is a nightmare for any attorney. To gain firsthand perspectives on these high-stakes matters, South Florida Legal Guide interviewed plaintiff’s attorney Warren R. Trazenfeld and defense attorneys Richard Critchlow, Deborah Corbishley and Elizabeth Honkonen. Here are their insights and suggestions.
The Plaintiff’s Perspective
Today, any attorney is at risk for a legal malpractice lawsuit, says Warren R. Trazenfeld, founder and managing partner, Warren R. Trazenfeld, P.A. in Coconut Grove. “One of the first traps for attorneys is being unwilling to believe it could happen to you,” he says. “A lot of bad lawyers get sued for legal malpractice, but so do really good lawyers, big firm lawyers and solo practitioners. We are all at risk, so be careful and buy insurance coverage. You will be glad you did.”
In the past few years, Trazenfeld has seen an increase in malpractice suits in several areas of the law, including real estate transactions and family law matters such as adoptions and estate planning. Although commercial litigation spawns a large number of malpractice suits across the country, it is not a major factor in South Florida, says Trazenfeld.
“While there are some legal malpractice cases that have come to my attention that should never have been filed, there are far too many cases where a lawyer committed a provable error with resulting significant damages to his or her client,” he says. “Some of these attorneys are clueless, while others put their own interests first to the detriment of their clients.”
Generally, a lawyer can only be sued for malpractice by a former client, Trazenfeld says. However, there is an exception for beneficiaries named in a will. “Because the beneficiary lacks a personal relationship with the lawyer these cases often become acrimonious,” he says. “The transfer of wealth among several generations, also leads to legal malpractice suits, particularly when the deceased has multiple marriages with different children.”
When a plaintiff sues a lawyer for malpractice, it’s important for the attorney to advise the insurance company about a potential claim, says Trazenfeld. Otherwise, the insurer may deny coverage or reserve its rights. While a majority of malpractice cases ultimately settle, the plaintiff’s attorney should always be prepared to try the case, he adds. “If it comes down to whether a juror believes the lawyer or the client, the client wins almost every time,” he says.
Drawing from more than 25 years’ experience as a plaintiff’s attorney, Trazenfeld has several suggestions to reduce the risk of a malpractice suit.
Finally, Trazenfeld says the most important step occurs during client intake. “Don’t be afraid to turn down a client who has already been through three or four different lawyers or has extensive litigation experience,” he says. “If you feel wary about taking on a new client, trust your instincts, and just say no.”
The Defense Perspective
Legal malpractice lawsuits are on the rise for a number of reasons, according to Richard Critchlow, Deborah Corbishley and Elizabeth Honkonen, partners at Kenny Nachwalter in Miami who defend attorneys from midsize and large firms.
“When clients lose a lawsuit or a transaction does not turn out the way they expected, they often look to blame someone else for the result,” says Critchlow. “Often, the people clients look to blame are insured professionals, such as their attorneys.”
Another reason for the upturn in legal malpractice cases is the pressure to generate new business, adds Corbishley. As a result, an attorney may take on a new case without considering the risks involved in handling a matter for that client. “Don’t shortchange your assessment and underwriting process,” she says.
Corbishley says the “red flags” on client intake include an entrepreneur in financial trouble, a business owner who needs help with refinancing, a client who has fired multiple prior attorneys, or any client who may be engaged in criminal activity. “These clients are looking to solve an immediate financial problem and think they can make a quick buck by suing their attorney,” she says “They may even threaten the attorney with reputational damage by saying, ‘You don’t want to see this in the papers.’”
The risk of being sued for malpractice is there for any attorney, whether at a small firm or a large firm, says Critchlow. “Nobody ever thinks they will be sued by a client they’ve known for years, but things can change quickly,” he says. “Professionals like attorneys and accountants are perceived as having deep pockets, making them attractive targets for a plaintiff’s suit. However, insurance companies don’t want to be perceived as ‘soft,’ and will fight these cases rather than give in with a quick settlement.”
In fact, Critchlow, Corbishley and Honkonen approach every case as if it will ultimately go to trial. “We want to be able to explain the case in an easily understood manner,” says Honkonen. “We also want the jury to see our client as a likeable person with strong legal skills.”
Having adequate insurance protection can provide financial protection against a malpractice suit, says Critchlow, who suggests purchasing a policy based on the scope of the practice. “If you are handling transactions of $1 million or more and you only have a $500,000 policy, you are underinsured,” he says. “Some attorneys get insurance from low-premium companies who have the power to control who the lawyer hires and what they are willing to pay to defend the case. But if it’s a ‘bet the firm’ case, you want an experienced attorney defending you.”
Sufficient coverage is vital for attorneys in securities, banking and intellectual property because they are high-exposure legal fields with “land mines” that can result in malpractice suits against even good lawyers, Critchlow adds. For instance, a calendaring error that leads to a missed deadline in a patent, copyright or trademark case can cause serious problems for a client.
Critchlow also recommends getting “tail coverage” on a policy to provide coverage for incidents that occur during the coverage period but are not asserteduntil after the coverage period. “In real estate, for instance, a problem may not show up for several years,” he says. “Tail coverage can also protect a lawyer from any claim dating from actions at a prior firm.”
From their long experience, the Kenny Nachwalter defense team has several suggestions for reducing the risk of legal malpractice suits.
Finally, an attorney should be prepared to end a bad engagement, even if it results in a financial loss. “If you sue a client for a fee, be ready to defend a counterclaim for malpractice,” says Critchlow. “Even if you didn’t do anything wrong, that suit will cost you time and money and distract you from your law practice. Do what you can to collect your debt, but at a certain point, close the file and consider it a lesson for the future.”
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