"Avoid A Claim" Blog

The ABA Legal Technology Resource Center blog posted a warning this morning that all of us should pay heed to: Be Careful! Twitter Phishing Catches Lawyers, Too

What is “phishing”? Email messages (or even tweets) that trick innocent users into entering their account information (for any account: a Twitter account, an email account, a bank account etc.) into a fake log in page, effectively handing control of their account to a malicious third party.

In the case of these recent Twitter phishing attempts, the usurper then uses the innocent individual’s Twitter account to send out spam, malware, and more phishing attempts via Twitter’s “direct message” (DM) feature.

Don’t think you won’t be fooled. While I don’t know of anyone hit in the latest round of Twitter phishing, last year one of my more tech-literate friends was tricked into revealing his MSN account login info (the people in his address book then got a message asking them to send him money so he could get home as he was stranded in a foreign country after having his wallet and passport stolen). And, an otherwise very bright lawyer I know was recently tricked into disclosing his bank account access info.

A phishing message will get your attention because it will play on the fear of your account being hacked. The phishing message and the fake login page will look very real. It is all too easy to be fooled by these scams. There is good advice on how to recognize phishing and how not to get tricked in the LTRC post. Please read it!

Cross posted on Slaw.ca

The OBA Law Practice Management Section is presenting a lunchtime CLE/webinar program on legal technology on Monday March 1, 2010 at 12:00 pm. Come to this session to find out how you can imbed technology into every aspect of practicing law and how to use it to increase productivity, efficiency, and flexibility while reducing costs, stress and wasted effort. The presenters are Donna Neff of the Neff Law Office and Amer Mushtaq of Mushtaq Law. Both are doing great things with legal technology. Get the inside story and practical tips from them on the best way to use technology for everything from marketing and intake to preparing documents and managing conflicts. You will learn creative and cost-effective ways to use technology to enhance every aspect of their practices to achieve both success and work-life balance.

Go here for more details and a registration form.

Just over two months ago I did posts on SLAW and AvoidAClaim that warned family law lawyers to be aware of bad cheque scams on matters involving the collection of outstanding spousal support. [See either of the earlier posts for the actual text of one of these messages.]

Family lawyers continue to be the targets of fraud attempts – even more so than two months ago. On an almost daily basis I am getting at 2-3 calls and emails from Ontario lawyers who have been approached to act on matters that are clearly frauds. On some occasions it appears dozens or even hundreds of lawyers are targeted with a single email blast.

Lawyers in other practice areas must remain vigilant as well. We continue to see attempted frauds involving debt collections, and we also continue to see real estate frauds as well (more ID theft now, as flip frauds are harder in a slower market when property values are not rising).

My practice management advisor colleagues in other provinces and states are telling me that they are also seeing large numbers of attempted bad cheque frauds – and some successful ones too. While I am sure bad cheque frauds are just a prevalent in the U.S., the problem is hidden as in any given state lawyers are insured by many different insurers, and some have no insurance at all. Good to see that the U.S. legal trades have finally picked up on this:

• An ABA Journal article on $500,000 in successful email frauds in Hawaii
• An ALPS newsletter on the million dollar plus frauds they are seeing

I hope increased awareness by lawyers of the frauds that are targeting them will help some avoid being victimized.

To keep lawyers informed of how frauds targeting them are evolving, I wrote this post to highlight some aspects of recent frauds we have seen.

• In Ontario we have seen three instances where fraudsters have forged multiple cheques written on law firm trust accounts (either from scratch or on cheque stock). While we are not familiar with all the circumstances in which these various cheques were tendered, one has to presume that the fraudsters intended to benefit from the fact that a cheque written on a law firm account would receive less scrutiny than one coming from an unknown entity. In one case, several counterfeit cheques were created in an apparent attempt to take funds from the general account of a law firm’s holding company.
• I have seen several attempts at frauds in the last few months where the amount involved was lower, and thus appeared to be more reasonable and real. For example, $150,000 on a spousal collection matter looks more reasonable or typical as compared to $850,000.
• I am also seeing frauds where the fraudster is making efforts to appear to come from a trusted referral source. For example, the fraudster is contacting a real estate agent and asking for the name of several lawyers in a particular community and when the initial call or email comes in the reference source is highlighted. My friend Jim Calloway saw an example of this in Oklahoma just last week.

Sorry to sound like a broken record on this, but keep your guard up and follow these steps to avoid being duped:

• Make sure you are familiar with the common types of bad cheque frauds that target lawyers, and the red flags that can help you spot the fraudulent matters.
• Educate your staff on common types of bad cheque frauds their associated red flags. Law firm staff can sometimes be in a better position to spot fraudulent matters. We have seen cases where junior lawyers, support staff or law office accounting staff have prevented frauds because they spotted red flags that the lawyer did not see.
• Religiously follow the client identification and verification steps required by the know-your-client rules.
• Carefully review the details of any matter you are handling to make sure it is a legitimate one. If things don’t add up, ask more questions and dig deeper.
• Be cautious and check the validity certified cheques or bank drafts deposited into your trust account. Ideally, try to have funds deposited in your account by a wire through the LVTS system.
• Cross-check bank and payor information (spelling of name, address, account and transit numbers, phone numbers) on independent sources (e.g., a bank or payor website).
• Never be in a rush to disburse funds from your trust account – especially if your client is really pushing to get the funds quickly.
• Always remember, if it looks too good to be true, it probably is.

Use the free fraud prevention resources on the practicePRO Fraud Page (www.practicepro.ca/fraud) to help the lawyers and staff in your firm avoid being duped. In particular, these resources will help you and your staff avoid being duped:

• Download our Fraud Fact Sheet and give it to the lawyers and staff in your office. It lists the common types of bad cheque and real estate frauds and the red flags that will help you spot a fraudulent matter.
• Listen to the archived LAWPRO webinar presentation on what frauds look like and how to avoid them. Access the MP3 (audio) file and the program PowerPoint and materials.

Lastly, call your insurer if you suspect you have completed or are acting on a matter that appears as if it might be a fraud. Claims staff can talk you through the common fraud scenarios they are seeing to help you spot red flags and ask the appropriate questions of your client to determine if the matter is legitimate. And, if you have been duped, they can help you take appropriate steps to respond and deal the matter.

Cross-posted on SLAW

Please check the mailing address you have for LAWPRO in your contacts and database systems. We are still getting mail addressed to our old address, even though we moved two years ago! Please send LAWPRO mail to our current address: 250 Yonge Street, Suite 3101, P.O. Box 3, Toronto, Ontario M5B 2L7.

The latest issue of LAWPRO Webzine has a great article on how to avoid limitations claims by LAWPRO’s director of research, Debra Rolph. The Limitations Act, 2002 was proclaimed in force just over six years ago. We had hoped the simplified limitations period regime the new Act created would result in fewer limitation-related claims. While we still think this will be the case in the longer term, in the shorter term the interpretation of this Act has given rise to abundant litigation. Some difficulties remain unresolved. Read Debra’s article for some practical advice on where the risks are and what you can do to avoid them.

You can subscribe to LAWPRO Webzine here.

As of January 1, 2010, big changes to three parts of Ontario’s Rules of Civil Procedure came into effect. These changes are intended to streamline the litigation process and increase access to justice. Many of the changes to the rules are a result of the Civil Rules Committees (CRC) consideration of the Osborne report. These are the most extensive amendments to the Rules of Civil Procedure since they were first adopted in 1985. There are no general transitional provisions and in most cases these amendments apply to existing proceedings.

Taran Virtual Associates has created a handy chart that has a side by side comparison of the old and new rules. Ontario lawyers should make sure they are familiar with the changes to the rules.

Cross posted on Slaw.ca

practicePRO’s claims prevention and law practice management resources continue to grow in popularity with lawyers. In 2009 almost 150,000 copies of our articles, checklists and precedents were downloaded.

We’ve compiled the list of the forty most popular downloads for 2009. Many of them are consistently popular year to year, such as Peg Duncan’s e-discovery reading list, limitation periods charts, retainer precedents and various technology articles. There were a few interesting developments though:

• The Sample Budget Spreadsheet came in in the top spot, with twice as many downloads as last year. A sign of lawyers taking a closer look at their finances in a tough economic year?
• The LawPRO Fraud Fact Sheet had 2,500 downloads, and has proven to be a very popular resource for lawyers looking to avoid becoming victims of the ever more sophisticated frauds targeting them.
• Lawyers love their BlackBerrys. Our BlackBerry 101 tips article from the summer of 2008 is still in the top ten a year later.

The top downloads list is a good indicator of what’s of interest to lawyers year over year, and what issues are concerns in certain years in particular. We’ve tracked the top downloads for each of the past four years.

See the forty most popular downloads for 2009 for tools and resources you can use to reduce your risk of a malpractice claim. The top downloads of 2008 and 2007 are also posted on this page.

The current #1 on the New York Times most popular articles list is an item that appeared in the Technology section on the weekend: The 3 Facebook Settings Every User Should Check Now.

In terms of complexity, the Facebook privacy settings lie somewhere between the calculations behind a space shuttle launch and figuring out what the Maple Leafs need to do to win a Stanley Cup. These things are simply beyond most of us mere mortals. I think it is safe to say that most Facebook users do not appreciate all the nuances of Facebook privacy settings, especially when it comes to third-party apps.

This is the clearest explanation of the basic Facebook privacy settings I have ever come across. If you are a Facebook user you should read this article and tweak your privacy settings.

Cross posted on Slaw.ca

I am pleased and honoured to have AvoidAClaim recognized with a Canadian Law Blog Award (AKA “CLawBie”) in the Practice Management category. There was actually a tie in this category and I am pleased to share the podium with my fellow practice management advisor and friend David Bilinsky and his Thoughtful Legal Management blog.

The Canadian law blogging community continues to grow and evolve and I am pleased to be part of it with AvoidAClaim and to participate on SLAW which won the Best Canadian Law Blog CLawBie. The CLawBies are in their fourth year now. See a full list winners and nominations at www.clawbies.ca.

Serving as a director of a charitable or not-for-profit corporation can be a rewarding but potentially risky experience. A director can be held personally liable for his or her own actions or failures to act, as well as jointly and severally liable with the other members of the board of directors. Directors with specialized knowledge and expertise, such as lawyers, are held to a higher standard of care. LAWPRO’s standard professional liability insurance policy provides coverage only for the “professional services” that a lawyer provides as a lawyer. It does not provide coverage for liability arising as a result of a lawyer’s actions as a director.

Accordingly, here are some questions you should ask yourself before serving as a director on the board of a charity or not-for-profit organization.

1. Does it engage in activities that have an especially high risk of attracting legal liability?
2. What are my motivations for joining this board – business, personal, community service, etc.?
3. Will I be able to devote my time and energy to ensure that I fully meet my obligations in this role?
4. Do I understand the risks and responsibilities that come with directorship? Am I aware of the statutory and common law liabilities that I may be exposed to?
5. Does my firm have a policy regarding its lawyers serving on the boards of charities and not-for-profits?
6. Is the charity or not-for-profit organization a client of my firm? If so, does my firm have a policy regarding its lawyers serving on the boards of charities and not-for-profits that are clients of the firm?
7. Will the charity or not-for-profit organization agree to indemnify me for liability arising out of my role as director?
8. Does the charity or not-for-profit organization maintain directors and officers (D&O) insurance to protect me from personal liability arising out of my role as director?
9. If so, what are the details of this D&O insurance? What policy terms, conditions and exclusions are likely to apply? What are the limits of liability per claim and in the aggregate?
10. Is there an outside director liability (ODL) insurance policy in place that may respond to claims against me arising out of my directorship? If not, should I purchase such insurance, whether from the Canadian Bar Insurance Association (CBIA) or through my insurance broker?
11. Is there any other insurance in place or optional coverage that may be purchased that may cover my activities as director? Have I consulted my insurance broker? (Note: LAWPRO’s optional excess insurance policy does not provide incidental D&O coverage, but some excess professional liability insurance policies may do so. If so, does that coverage “drop down” to afford primary protection?)

If you are contemplating sitting on a non-profit board, please consider the above questions so you can understand and assess the risks of doing so.

An Acrobat PDF version of this checklist is available on the LAWPRO website.