Legal malpractice can sometimes seem like a rather mysterious area of the law in that people may be uncertain as to the circumstances in which these types of lawsuits may be pursued and just how common they really are.
The good news is that our blog has been structured in such as way as to provide much-needed information about this first issue. The other good news is that the insurance brokerage firm Ames & Gough recently released a fascinating survey providing some insight into the latter issue.
To recap, Ames & Gough surveyed nine different insurers that collectively provide malpractice coverage for 80 percent of AM Law 100 firms, asking a series of questions about their claim realities in the area of legal malpractice.
For those unfamiliar with the concept of "AM Law 100 firms," it's an annual survey ranking law firms here in the U.S. by such metrics as profits per partner, number of attorneys and total revenue that's published by the legal magazine The American Lawyer.
The results of the survey revealed that while the number of legal malpractice claims being filed has stabilized in recent years, it's still well above pre-recession levels. Furthermore, the survey found that insurers are now paying more for malpractice claims, the defense of which is now averaging over $50,000 per claim.
One of the more interesting revelations of the survey was that the primary source of legal malpractice claims are conflicts of interest created by the lateral hiring of attorneys.
In general, the lateral hiring of attorneys involves those scenarios where experienced attorneys are brought aboard from other law firms, meaning they haven’t been with the firm since the start of their career.
“As the legal landscape changes through mergers, acquisitions and lateral hiring, firms run the risk of increased conflicts,” said a senior vice president with Ames & Gough. “Too often, conflicts are an afterthought when attorneys move from firm to firm; and even when conflicts surface they are often ignored or overlooked.”
This is truly valuable insight and only serves to underscore how those clients who believe they've suffered some manner of financial harm owing to an attorney's conflict of interest should strongly consider exploring their legal options.