"Tip Of The Week" - Don't Buy Into The Myth 'New Attorneys Are Malpractice Cases Waiting To Happen'

I get so angry when I hear this, "What does a new attorney know?  They are malpractice cases waiting to happen."  False.  And mine is not an emotional response to the hype simply because I encourage those who want to open their own practices right out of law school.  My job is to remove or assist in dealing with those perceived hurdles to solo practice.  And this one angers me the most because it is perpetuated by professors, family, and mostly the profession as a whole.

First, let's distinguish between grievances and malpractice claims.  There are grievances (generally driven by poor office management skills and communications skills between the attorney and the client) and malpractice cases (failures in the actual practice of law which cause legal harm to the client.)  Grievances are complaints filed against an attorney with their statewide grievance committee who has the power to suspend a lawyer and/or strip them of their license to practice law.  Malpractice cases are bona fide cases upon which the attorney is sued in court which triggers the potential need for malpractice (errors and omissions) insurance.  A grievance can, if warranted, also become a malpractice case. And vice versa.

A significant percentage of 'complaints' lodged with Grievance Committees come from clients of solo practitioners. (As to why solos are so frequently targeted by the Grievance Committees for grievances is the basis for a future guest post by Ben Cowgill and it's not because they are warranted.) Many of these complaints generally result from clients feeling ignored by their lawyers. This is perfectly understandable as solos, wearing multiple hats, can be more scattered and less regimented with their communications than attorneys in large law firms.  However, this can be handled effectively with established office protocols, especially for a solo.  Failure to communicate has always been the number one trigger for a grievance.

Malpractice, on the other hand, is a more interesting discussion.  I hear professors repeating over and over,again, 'you can't possibly know what you are doing because you don't know what you don't know.'  Well, you can be out thirty years and not know what you don't know.  There are just too many stories out there of more experienced lawyers being sued for malpractice because they have actually become complacent about what they think they know, believing they know everything and as a result this triggers failures that harm their clients.  New attorneys are pretty sure they know nothing and research, research, research.  As one of my recent panelists said to my class, 'you don't know anything for sure, but you've been taught to find the answers."

But I'm going to be more coldly logical in my assertions to bust this myth.  In your entire career malpractice insurance will never be cheaper than when you first pass the bar and for the two to three years following your admission.  Huh?  If I'm a walking malpractice disaster wouldn't that be just the opposite, sort of like a sixteen year old male just getting his driver's license?  You would think.  Not so.

Here's my cold 'dollars and cents' logic. Nobody messes with an insurance company's profits.  They have more bean counters to assess risk then Bob Marley had hairs on his head and there is no way they are going to set themselves up for massive exposure if the risk was truly there.  The reality is the risk isn't there for many reasons. 

In the beginning you will have very few cases and chances are those cases will not be huge dollar cases with tremendous financial exposure for a carrier.  This gives you more time to actually work those cases, sweat over those cases.  If you take on a case that maybe is too large for your knowledge base or skill set, you are more likely to seek out mentorship and assistance or you will refer it out and take your referral fee.  Your first cases in your first years will probably have more individualized attention than future cases when you will have quantity and possibly need others to track all the details to the degree you did personally in the beginning.  And it is in later years when the quantity of your cases increases that the likelihood of your making some costly legal mistake is greater. Therefore, your premiums are greater to cover the increased risk to the insurance company. This is the reality.

I won't get into the nuances of insurance contracts which have more trap doors and terrifying bogeymen then a haunted house.  But the reality is the insurance company is not setting themselves up for exposure by offering low premiums to new attorneys.  And therefore, you should not buy into the emotional hysteria surrounding those who will tell you, 'you're going to get sued!!'  Use common sense.  And as I am so fond of saying, 'follow the money.'

Comments

[Chris Earley]

Susan -

You have a wonderful blog! I have been reading it for a few months and you have posted some great information. I recently added your blog to my blog roll. Keep up the great work!!! Chris Earley

[Ann]

Thanks Susan. That was so nice to read. I'm working on my first case with a reasonable amount of money involved-- I'm calling every experienced attorney who ever expressed an interest in a new attorney, me, to ask them about it. I've spent tons of time in the library. So far my biggest weakness has been my superficial knowledge of the local rules-- and I'm working on that. Law school did teach me to tab a book and make notes in the margins!

The experienced attorneys that I've talked to who are very familiar with the area of law I'm working with don't have clear cut answers for me about my case, either. The concrete, wonderful information-gifts they're giving me are primarily practical stuff-- what TYPE of motion, how to serve a sneaky, savvy pro se, when I can't get him served in time, how to get an order to shorten time. That sort of thing. The advice is invaluable. But the fact is that I'm working on an unusual case and the guys approaching retirement approach it like an unusual case, too. It's a small comfort when I start to freak out about my upcoming court appearances, but it helps.

That said, I'd FEEL better if I had malpractice insurance!

[Legal Living]

This was a very good post. As part of my insurance law LLM program, I spent a lot of time studying rating/pricing practices of insurance companies. And you are correct that companies wouldn't undercharge. In fact, it's likely a matter of not being allowed to undercharge, as rates cannot be inadequate.

With that said, the very first thing I did when I first went out on my own was to get malpractice insurance!

[Carolyn Elefant]

Susan,
I just wanted to add that the statistics (FWIW) back you up on this point. I realize that malpractice and grievances are different animals, but a DC Bar study showed that the largest number of grievances are filed against lawyers when they've been in practice 8-15 years. I would imagine that malpractice claims track the grievance statistics for the reasons you describe in your post, e.g., over confidence or handling larger matters with more at risk.