Leading Reasons Attorneys Get Sued

December 16, 2024 Law Firms, Loss Prevention, Solo Attorneys

Attorneys can face lawsuits from clients, their families, or third parties, even without making an obvious mistake. The unsettling truth is that even lawyers who meet professional standards can find themselves targeted. Surprisingly, legal errors, missed deadlines, administrative oversights, and miscommunications aren’t the only reasons attorneys get sued. In fact, many lawsuits stem from issues that aren’t immediately apparent, like conflicts of interest or even unsubstantiated claims.

Being tangled up in a lawsuit can disrupt workflow, jeopardize client relationships, and threaten your law firm’s financial and professional standing. By understanding the common pitfalls that lead to legal malpractice claims, you can take proactive steps to protect your practice. The following are the 15 leading reasons attorneys get sued:

Negligence

Legal negligence occurs when an attorney fails to meet the standard of competence expected in their field, resulting in harm to the client. Examples include missing deadlines, failing to file necessary documents, or not adequately preparing for a case.

Failure to take reasonable care of a client’s legal matter and perform competently can result in considerable issues for clients. They may suffer financial losses or even lose their legal rights. Either way, it can carve an easy path for claims against the attorney for damages.

To mitigate these risks, prioritize regular training for yourself, your colleagues, and legal staff. Annual training is recommended, but staying informed about changes in the laws and best practices throughout the year is equally important.

Implementing a system for case reviews by experienced colleagues is a powerful way to uncover potential errors and gain valuable feedback. These reviews can improve efficiency, catch issues early, and enhance your firm’s processes.

Negligence claims can be costly, with average losses ranging from $25,000 to $500,000, depending on the case’s importance and the consequences involved.

Administrative Errors

Mistakes happen, whether due to human error or technology failures. Administrative errors like incorrect filings, missed deadlines, or lost documents can jeopardize cases and lead to lawsuits from clients.

According to the “2020-2023 ABA Profile of Legal Malpractice Claims” Report, 22.87% of claims stemmed from administrative errors. These often arise from poor organization or oversight, with even minor mistakes potentially resulting in case dismissals or unfavorable outcomes.

To reduce the risk of administrative errors, establish and enforce strong operating procedures. Incorporate a quality control process to review all documents before submission to help catch errors before they are sent out.

As with any process and risk mitigation strategy, frequent training is key. Regularly training staff on administrative protocols helps keep everyone on the same page and avoids a lapse in best practices.

Claims arising from administrative errors often result in losses between $25,000 and $500,000, depending on the nature of the error and its impact on the case.

Missing Filing Deadlines

Legal cases are governed by strict timelines. Failing to meet a deadline can result in the dismissal of a case or the loss of a client’s right to appeal. Missing a deadline can result in significant financial consequences for clients and may lead to potential malpractice claims against the attorney.

To reduce this risk, invest in quality case management software. These tools help track deadlines, send reminders, and streamline workflows, making them invaluable for successful law firms.

Scheduling periodic reviews and check-ins of case timelines is a great safety net process to implement. Changes can occur during a case, making regular check-ins essential.

Claims related to missed deadlines typically result in losses ranging from $25,000 to $500,000, depending on the case’s significance and impact.

Conflict of Interest

Failing to identify conflicts of interest can result in ethical violations, lawsuits, and disciplinary actions from bar associations.

Avoid conflicts of interest by implementing a robust system for identifying potential conflicts. Software options, such as Clio or MyCase, can help streamline this process. You can also mitigate risk by creating clear policies and developing guidelines for handling conflicts when they arise.

Claims from interest conflicts can lead to damages ranging from $100,000 to several million dollars, especially if the conflict significantly harms the client’s interests.

Inadequate Case Evaluation

Rushing into a case without thorough evaluation can lead to poor decisions, weak claims, and unfavorable outcomes for clients. This often results in dissatisfaction and lawsuits, especially when clients feel their interests were not adequately represented.

Failing to gather sufficient evidence or fully understand the legal landscape can leave both attorney and client vulnerable. This failure can result in negative results for clients, leading to dissatisfaction and potential lawsuits against the attorney for not adequately representing their interests.

Take the necessary time to conduct a comprehensive evaluation; undergo proper research, thoroughly interview witnesses, and question your client from the opposing counsel’s perspective. You can also go a step further on more complex matters by seeking input from specialists or experienced colleagues.

Clients may pursue damages ranging from $50,000 to $1 million, particularly if the inadequate evaluation leads to substantial financial losses or lost opportunities.

Breach of Confidentiality

Disclosing client information, whether accidentally or carelessly, can lead to a loss of trust, damaged relationships, and legal repercussions. Attorneys are professionally and legally obligated to keep client information private. A breach of confidentiality can happen through careless communication, unauthorized sharing, or even cyber breaches.

A leak or breach of personal data or confidential information can severely damage the attorney-client relationship. This can expose the attorney to legal action for violating confidentiality agreements, written or assumed.

To mitigate these risks, implement and enforce strict confidentiality protocols. Train your team to adhere to these policies, emphasizing that maintaining confidentiality is in the client’s best interest. Always use secure, encrypted communication methods and verify the legitimacy of unfamiliar or suspicious communications.

Losses due to confidentiality breaches often range from $100,000 and $500,000, especially if the disclosed sensitive information leads to financial loss or reputational damage for the client.

Mishandling of Client Funds

Improperly managing client funds can lead to lawsuits and severe consequences. Attorneys must handle these funds with the utmost care, keeping them separate from personal or firm accounts and maintaining clear, accurate records.

Mishandling funds can result in financial losses and emotional distress for the client, as well as legal consequences for both parties. To prevent issues, always use a designated trust account, reconcile accounts regularly, and maintain meticulous records.

Losses from mishandling client funds can vary greatly, depending on the amount involved and the severity of the error.

Failure to Follow Client Instructions

Ignoring or misinterpreting client directives can lead to dissatisfaction, legal malpractice claims, and significant financial consequences. Attorneys must adhere to their clients’ wishes as long as they are legal and ethical.

To manage this risk, maintain detailed records of all client communications and instructions. For verbal instructions, follow up in writing to confirm clarity and ensure goal alignment. Regular check-ins help keep everyone on the same page.

If a client’s request is ever unreasonable or raises legal or ethical concerns, consult outside counsel on the matter before moving forward.

Losses for such claims typically range from $50,000 to $500,000, with higher amounts likely when adverse legal outcomes occur.

Miscommunication

Communication is fundamental to maintaining a strong attorney-client relationship.

Attorneys can face lawsuits for failing to update clients on case progress, not responding to inquiries, or neglecting to explain case details. These lapses can lead to misunderstandings, leaving clients feeling neglected or misled, which can result in complaints or lawsuits against the attorney for emotional distress or breach of contract.

To mitigate this risk, prioritize clear, consistent communication. Regularly update clients on case developments, respond promptly to inquiries, and maintain detailed records of all interactions. Establish systems for clients to voice concerns and address potential issues proactively.

Claims related to communication issues have average losses of $10,000 to $250,000. Such legal malpractice claims often reflect emotional distress or dissatisfaction.

Professional Misconduct and Ethical Violations

Violating professional conduct standards can severely damage an attorney’s reputation and career, leading to disciplinary actions, loss of license, and lawsuits from a client seeking damages.

To mitigate risk, ensure ongoing ethics training and conduct regular audits to maintain and adopt best practices.

Claims involving ethical violations, particularly fraud, can result in substantial losses, often exceeding $1 million.

Failure to Self-Report

Failure to self-report misconduct or errors can lead to legal consequences, including lawsuits. The consequences can be significant, depending on the jurisdiction and the severity of the hidden misconduct or error.

Whether the failure to self-report is discovered by way of a client, colleague, or another legal professional, the aftermath can include a legal malpractice claim, reputational damage, disciplinary action, or increased sanctions.

Overworked

Lawyers can easily find themselves stretched thin and not devoting enough time and energy to their clients. When an attorney is overworked, the client and case can suffer. Often, this results in a simple oversight or an unhappy client that triggers a malpractice suit.

The remedy here is to simply slow down. Avoid flooding your caseload, and only take on what you can manage to ensure each client receives the proper care and treatment for their case.

According to the “2020-2023 ABA Profile of Legal Malpractice Claims” Report, law firms with five or fewer attorneys made up 55.56% of all claims.

Download this Task Evaluation Guide specifically designed for law firms!

Inexperience and Inadequate Supervision

It is not uncommon for lawyers, both new and seasoned, to accept cases that are beyond their experience. Whether you are a solo practitioner or a partner delegating cases, it’s important to consider experience when making decisions.

Providing incorrect legal advice due to inexperience can result in significant financial and legal losses for clients, leading to malpractice claims.

To mitigate this risk, avoid taking on cases just to gain experience, and don’t delegate tasks to associates without proper guidance. Ensure proper supervision of junior attorneys and provide ongoing training and resources to avoid errors that can negatively impact the client.

Lack of experience can lead to losses ranging from $50,000 to over $1 million, particularly if the inexperience leads to significant errors in handling a case.

Intentional Wrongs

A surprising 7.11% of legal malpractice claims stem from intentional wrongs, according to the “2020-2023 ABA Profile of Legal Malpractice Claims” Report.

Fraud, defamation, theft, misleading clients, and malicious prosecution are all actions that can lead to lawsuits. Attorneys who engage in such misconduct not only risk legal action but also risk damaging the reputation of the law firm.

Even Without Error, Attorneys Can Still Be Sued

Fact: Lawyers can follow every procedure, meet all deadlines, and still face a lawsuit.

Possible Reasons Include:

A client believes they could have received a better outcome.
The family members of an estate planning client are dissatisfied with the results.
A claimant suing their representing attorney saw your name on the door in the office building.

There are many reasons someone might file a lawsuit. Attorneys may believe it won’t happen to them, but for every reason they think they are protected, there are many more that could justify a lawsuit or complaint.

Wrapping up

A lawsuit isn’t the only threat to your reputation, anyone can file a complaint with the State Bar.

By understanding these risks in detail, law firms can better prepare and address them effectively. The severity of claims and financial losses can vary greatly depending on the specific circumstances of each case. So, law firms should seriously consider appropriate insurance coverage to mitigate their financial exposure.

Attorneys can significantly reduce their risk of facing lawsuits and maintain a strong, ethical practice by taking proactive steps, including: