Risks Facing Attorneys and/or Law Firms

        Professional Liability Coverage for Attorneys


     • Attorneys and law firms face exposures when performing any professional
     legal services, including giving advice to clients and assisting with legal matters,
     performing notary public or title agent services and giving investment advice.

     • New technologies such as digital document storage, electronic filing of
     documents and mobile technology may pose serious cyber liability risks.

     • Prior acts of a law firm or individual member, including employees, may
     trigger risks when attorneys and/or their employees move into new positions
     with different law firms or go into solo practice.

     • Practicing in areas of law which may be new or unfamiliar to an attorney
     or law firm may be necessary in today’s economy, but it produces risk.

     • Attorneys are at risk when performing moonlighting services or pro-bono
     work, or even when giving “cocktail party” advice.

     • Attorneys may face exposure when pursuing other business opportunities
     with clients, or when acting in a dual capacity, such as an officer or director for a
     client’s business.

     • Attorneys and law firms may face risk in a number of general areas, including
     workers’ compensation, advertisers’ liability, reputation management,
     discrimination, claims brought by regulatory agencies and real estate claims.

          ◦ The Lawyers’ Professional Liability Trends: 2012 study found that real
          estate law was the practice area generating the largest number of malpractice
          claims, which indicates the real estate market’s volatility.

     • Even changing insurance policies can carry risk, since policies can be worded
     slightly differently, or may contain a “prior knowledge” exclusion affirming that the
     attorney or law firm is not aware of any potential claims.

Professional liability coverage for attorneys and law firms in today’s business climate is a necessity, and in some cases is legally required. Although the overall number of legal malpractice claims is leveling off, the number of large legal malpractice claims is sharply rising. Every malpractice insurer that was surveyed for the Lawyers’ Professional Liability Trends: 2012 study paid or participated in paying claims in excess of $50 million. Similarly, nearly all surveyed organizations saw anywhere from a 6 to 21 percent increase in the amount of claims totaling more than $500,000 in 2012.

These dramatic increases are due in part to a weakened economy in which attorneys are forced to change jobs more frequently or practice in new areas of the law. Additionally, newer methods of communicating (email, social networking sites) and using digital information (electronic filing of court records, electronic document storage) regularly expose attorneys and law firms to the potential for malpractice claims. It is imperative that attorneys and law firms recognize emerging legal malpractice risks and purchase coverage to protect against those risks.