Lessons Legal Malpractice Trends Provide Regarding Future Professional Discipline Allegations

State bar complaints in Missouri or Kansas can be based on conduct that violates ethical rules even if the acts or omissions do not rise to the level of a criminal offense or a legal malpractice claim.  However, legal malpractice or a criminal offense that constitutes an offense moral turpitude comprises common paths to becoming embroiled in state bar disciplinary proceedings.  Because a high volume of bar complaints arise out of allegations of legal malpractice, a recent report discussing legal malpractice claim trends provides guidance on future patterns in disciplinary charges.

The recent report published in the Insurance Journal acknowledges that law firms are confronted by more extensive liability risks as they adapt to the realities of the present business environment.  The recent study by a major legal malpractice carrier reports a steady flow of legal malpractice claims, including claims in excess of $50 million.  The notion that professional discipline tends to involve solo practitioners and small law firms is refuted by this report.  The study focused on claims handled by ten of the largest legal malpractice insurers, representing three-fourths of AM Law 100 law firms.  Some of the findings that can guide attorneys looking to avoid malpractice complaints and professional discipline include:

Areas of Practice Most Frequently Subject to Malpractice Claims: When it comes to conduct that constitutes ethical violations or malpractice, all areas of law are not created equal.  Two in three malpractice insurers reported that probate and estate planning matters constituted the most common legal matters involved in claims.  This represents a change because real estate law has fallen to fourth after amounting to the leading cause of malpractice lawsuits during the prior four years.  Corporate and securities law constitutes the second highest practice area subject to malpractice claims while business transactions is the third leading cause of claims.  The drop in real estate claims is assumed to reflect the changed market and the resolution of many allegations made against law firms in the wake of the real estate market meltdown.

Volume of Claims Remained Reasonably Stable: The report notes that claims rose to an all-time high during 2011 and 2012 when law firms grew rapidly and merged in attempts to respond to an environment of intense competition.  The authors of the report indicate that law firms need to focus on the expanding and evolving risks associated with growth and expansion.  As the concentration of law firms had slowed, so have malpractice claims.  Half of the insurance carriers reported that claims against law firms in 2014 remained consistent with the volume from the previous year.  Two of the remaining firms saw greater claims activity while two others saw less claims activity.  The overall conclusion was that malpractice claims remained essentially constant from 2013 to 2014.

Legal Issues/Matters Causing Highest Number of Claims: Conflict of interests are consistently the leading cause of claims, especially as law firms seek to expand through mergers and acquisitions or lateral hires from other firms.  The conflicts created by such combinations are often not identified early enough, or they are disregarded.  While cyber exposures have not been as prevalent, three malpractice insurers identified cyber or network security events as the basis of malpractice claims.  Given the rising issue of cyber security and professional obligations regarding attorney-client privilege and confidentiality, this an area expected to see significant future growth in terms of malpractice claims.

Kansas Professional Licensing Lawyer Danielle Sanger is prepared to investigate the allegations against you and aggressively pursue available defenses to protect your law license.  If you are facing a state bar complaint, Attorney Danielle Sanger represents attorneys facing disciplinary proceedings in Missouri or Kansas, so call us today for a free consultation at 785-979-4353.