ABA study offers snapshot of legal malpractice claims

Daily Record, The (Baltimore), Aug 25, 2005 by Ann W. Parks

Attorneys looking to reduce their legal malpractice risks might start by checking the latest survey conducted by the American Bar Association's Standing Committee on Lawyers' Professional Liability.

The committee this week issued its most recent profile of legal malpractice claims, a compilation of statistics on the number and type of claims received by insurers nationwide. The report strives to provide not a comprehensive picture - it relies on self- reporting by 18 participating insurers - but a snapshot of claims activity.

It's just a heads up, so those involved in loss prevention can determine the areas with the most exposure, explained Benjamin H. Hill III, the Florida lawyer who chairs the committee.

The profile looks at the number of malpractice claims reported in various ways, including areas of practice, firm size, the type of activity giving rise to a claim and the type of alleged error. It covers claims received from 2000 to 2003. While the committee conducted similar studies in 1985, 1995 and 1999, the report contains a caveat that the data collection methods and participants have varied.

Personal injury and real estate work have remained steady for the past 20 years as the most significant areas of law for claims - 20 percent and 16 percent of all claims, respectively, in the most recent study.

Interestingly, claims against plaintiff's personal injury lawyers have decreased since 1999, from 25 percent to 20 percent, and claims against personal injury defense lawyers have risen from 4 percent to 10 percent, Hill said.

Granted, the study is not likely to make personal injury or real estate practitioners suddenly switch to such areas as admiralty, international or antitrust law, which received the least number of claims.

You just have to be aware that you're dealing with very personal expectations of people, rather than running to become an antitrust lawyer, said Norfolk lawyer Michael A. Glasser, who serves on the standing committee and whose firm practices both real estate and personal injury law. Both areas touch on large amounts in dispute; personal injury by definition is subjective, in terms of the value of a claim.

Glasser speculates that these top two landmine areas for lawyers have traditionally been the province of smaller firms and solo practitioners, who have to juggle the pressures of administration in addition to their legal work. Antitrust law, the area with the least number of malpractice claims, is rarely practiced by solo attorneys, he noted.

Still, the study cautions against jumping to conclusions, and it is not difficult to see why. Though solo practitioners and firms with two to five attorneys accounted for more than 65 percent of the claims in the study, Michael J. Chomel, who chairs the Maryland State Bar Association's Solo and Small Firm Practice Section, points out that 80 percent of lawyers in the United States practice in firms of one to five lawyers.

That's something people need to know, he said, adding that many, if not most solo practitioners are on the cutting edge in terms of technology and efficiency; and that many work in areas where clients may not be satisfied with any result.

Regarding type of activity, the survey saw a jump in claims since 1999 arising from pretrial, prehearing activity. That, and claims arising from the commencement of action and preparation or filing of documents remained at the top of the list overall.

Perhaps unsurprisingly, cases with no payout resulted in 61 percent of malpractice claims; claims with a payment for the plaintiff resulted in just 2.4 percent.

Overall, Hill said the data reflects a gradual increase in claims against lawyers - consistent with the increase in litigation - though it couldn't be called a spike.

If the plaintiffs don't win, they blame whoever they can point the finger at, he noted. There's the expectation that if they don't get what they want, it's someone's fault.

The report is available by calling 1-800-285-2221.