Should an attorney be blamed for a business failure?

It is not surprising that an attorney will be blamed for a business venture going sour. However, when a business fails, it is not usually a legal error that dooms the business. Nevertheless, clients will blame the lawyer for failing to provide legal advice that would have prevented the business from failing.

After all, with a business attorney being a skilled and experienced professional, he or she should have given advice that would have properly cautioned or prevented the client from making imprudent decisions. 

Indeed, some lawyers do have substantial business acumen and experience with certain types of transactions, it is not always clear when a lawyer has a duty that would lead to a malpractice claim if it is breached.

Although there is no bright-line rule regarding liability in this context, this post can help business owners understand when their lawyer’s missteps can lead to liability.

For example, a business lawyer must be able to advise the client of the risks that come with using a certain form of business. For instance, the characterization of a business as a sole proprietorship or partnership can lead to liability that a direct owner may not have to deal with if the business was incorporated as an LLC or C-corporation. Indeed, it is up to the business owner to operate the business within the bounds of the law, but if the lawyer specifically neglects the client or provides unverifiable advice, the lawyer could be held liable.

If you have additional questions about an attorney’s liability, an experienced malpractice attorney can help. 

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