The Specter of Malpractice: When Law Firm General Counsel and Risk Management Professional Are Confronted With Potential Malpractice Claims and Ethics Violations
Joseph R. Tiano, Jr., Nancy B. Rapoport & William J. Siroky
Legal malpractice law and ethics rules are some of the scariest bodies of law for attorneys of all skill levels. This area of law is exceptionally complex, and the consequences for its misapplication are grave. During the past two decades, more and more law firms have established a dedicated compliance role—usually a full-time attorney serving as a risk management professional, an ethics/compliance expert, or a law firm’s general counsel, assigned to handle these important questions.
In many circumstances, such as when an attorney steals money from a client, the ethical and professional obligations of a general counsel and risk management professional are clear. However, in instances involving less clear-cut violations of professional duties, the path forward quickly becomes complicated. Occasionally, a law firm’s general counsel or risk management professional might not know how to proceed after learning about circumstances that loosely suggest that malpractice could have been committed or an ethical duty could have been violated.
This Article discusses the most important initial steps and questions that a law firm’s general counsel or other risk management professional must address when hearing that serious mistakes or improprieties may have occurred—but without any concrete confirmation that something problematic has, in fact, happened. Collectively, these circumstances are referred to as the “specter of malpractice,” because a malpractice claim has not yet fully materialized (and it is not entirely clear that one will materialize), but enough risk factors have surfaced to capture the risk management team’s attention. Included among these important and difficult questions are:
Could this type of mistake constitute an ethics violation or a future malpractice claim?
What duty does a firm’s general counsel or risk management professional have to investigate the situation?
What action is required with respect to the firm’s legal malpractice insurer and when should the law firm take that action?
What action is required with respect to the law firm’s clients and when should the law firm take that action?