May 20, 2005
Malpractice Suits on the Rise
Last week, Suzanne Rose, stopped by for a visit. Suzanne Rose is a Brentwood, Tennessee, based specialist focusing on practice management and the critical areas of law firm leadership, strategic management, practice administration and profitability. She is the author of an article posted on ABAnet.org titled Firm Culture: Is Your Firm Culture Exposing the Firm to Malpractice or Ethics Complaints?
Her article is particularly relevant today due to the significant rise in malpractice suits. Emma Schwartz writes in Legal Times, “It's getting more expensive for corporate lawyers to defend themselves.”
The number of big-ticket suits has risen dramatically in recent years. As a result, expect higher premiums, higher deductibles and fewer carriers willing to provide coverage. In other words, the cost to insure is continuing to climb upward. Higher cost alone is probably the “good news”. The bad news would be for your firm to be one of those hit with a major suit, i.e., $2,000,000 plus or for insurance carriers to decline to cover your firm all together.
Schwartz notes, “With mounting pressure from insurance companies, firms have centralized ethics procedures, hired in-house general counsel, instituted fresh ethics training and become more persistent about scrutinizing practice group management.”
All of this brings me back to Rose’s article on ABAnet.org. She identifies and describes symptoms of five cultural characteristics that put a firm at high risk for a malpractice or ethics complaint:
1) Short-Team View
2) Office–Space Sharers DBA/a Law Firm
3) Fiscal Irresponsibility
4) Lack of Trust and Integrity Among Firm Members
5) Eat-What-You-Kill Philosophy
Suzanne Rose does a great job of laying out the symptoms of each of the five areas, plus how those symptoms lead to malpractice exposure and what you can do to minimize your risk. She refers the reader to The Minnesota Lawyers Mutual Prolegia™ Web site, www.Mimins.com. The site has an on-line survey you can take to assess the adequacy of your risk management efforts.
To rate your risk management efforts, go to www.mlmins.com/PracticeManagement/RiskManagementSurvey.aspx.
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Filed under Risk managment by Tom Collins