"AvoidAClaim" Blog

Once you have decided that you are prepared to represent a client in a particular matter, you are ready to begin building a relationship with that client. Even if you already have a relationship with the client, but are taking on a new case, it is essential that you communicate with him or her to establish a mutual understanding of the nature and scope of the matter to be pursued.

practicePRO’s Managing the Lawyer/Client Relationship booklet contains the following checklist you can use to ensure you and the client are the same page as to what you are being retained to do and how it will proceed.

Generally

• Language of retainer must be clear and understandable.
• Document should provide for acknowledgment and acceptance of all of the terms by the client.
• Specify that any changes to the terms of the letter agreement must be in writing.

Parties to be represented

• Identify the client – obtain proper legal names for all persons and business entities.
• Identify all other parties in matters.
• If there are multiple clients, explain that the effect of lawyer/client privilege does not apply as between them.
• If conflict is being waived on consent, set out terms regarding consent.

Client’s objectives and strategy

• Identify the client’s objectives and propose strategy to meet the objectives.
• Outline the scope of representation and identify specificity of the retainer where it is limited.
• Identify nature and degree of factual investigation to be made.
• Explain ambit of legal analysis to be performed.
• Outline key steps in the representation.
• Provide an estimated time frame for all major work and identify critical points in time.

Client communications

• Set out line of communication and need for instructions.
• If there are multiple clients, set out the process for instructions and disclosure or need for ILA.
• Confirm type of reporting needed by the client.

Responsibilities of lawyer, staff and client

• Identify significant areas of responsibility vis-a-vis you, the law firm, the client or a third party, and include permission from the client before incurring significant expenses with third parties such as experts or other service providers.
• Define your level of authority and identify matters which specifically require the client’s consent.
• Explain and confirm delegation within your firm.

Safeguarding client property/investment of funds

• Identify property being held at your law firm and confirm arrangements for safekeeping.
• Confirm investment of any funds being held in trust.

Fees and expenses

• Identify the basis for the fees to be charged (e.g. fixed fee, hourly rates, blended option). If charges are on an hourly rate basis, the current rate for each lawyer and other time keeper assigned to the matter should be described along with an indication of whether rates are subject to change in the future.
• Review the nature of the out-of-pocket disbursements to be billed and distinguish between internal expenses such as photocopying and long distance charges as opposed to charges from an outside vendor such as court fees, government searches and agency fees.
• Set out the timing of rendering of accounts and period within which accounts are to be paid.
• Identify the need for any financial commitment in advance (referred to as a financial retainer) and terms upon which funds are to held/invested and drawn upon and replenished in the future.
• Describe billing format and elicit any particular billing format requirements of the client e.g. detailed statements – identify time keeper rates, tasks undertaken.
• Outline consequences, if any, of late payment of accounts and circumstances under which the retainer will be terminated for non-payment.

Grounds for termination or withdrawal of services

• Set out grounds for your termination/withdrawal (e.g. failing to receive instructions or any other grounds).

Problems with lawyer-client communication are the number-one cause of claims reported to LAWPRO. The way to prevent these claims sounds simple enough: Remind lawyers to communicate better with their clients.

However, appeals to “communicate better” can seem vague − or even a little “touchy-feely”. Need specifics? Consider the following list of practical strategies. These ten tips were chosen from Tim Lemieux’s article “Is anyone listening? Preventing communications claims” which appeared in the Fall 2011 issue of LAWPRO Magazine.

To communicate better:

1. Meet with the client yourself (don’t just rely on a clerk’s intake meeting notes).
2. Remember that the client is the person with value at risk in the transaction (the client’s representative, child, parent, interpreter, etc. is NOT the client).
3. Ask questions about WHY the client wants what he or she wants. Why does she want to buy this particular property? Why does he want to disinherit his daughter? Why is she waiving disclosure? Why is he not proceeding against a particular potential defendant?
4. At the initial meeting, communicate your views about: the client’s prospects of success; your estimates with respect to cost and timing; and an overview of proposed processes and procedures. Document this discussion.
5. Document your instructions (both initial instructions and changes in instructions, settlement instructions, etc.).
6. Explain what you will NOT be doing for the client (for example, you will handle a commercial transaction, but cannot provide a tax opinion about its effects; you have been retained to handle a personal injury claim, but not to negotiate with the client’s workplace LTD insurer).
7. Touch base with the client at regular intervals during a long litigation, even if there’s no news.
8. Communicate the details of settlement offers in writing; and in addition, explain the effects and consequences of the proposed terms to the client. Review drafts of documents with the client.
9. Explain the legal effect of settlements, waivers, releases, contracts and anything else that affects clients’ rights. Document these conversations, including any questions or concerns raised by the client.
10. Send a reporting letter at the conclusion of a matter; include mention of anything that requires follow-up by the client.

Want to know more about how communication problems lead to claims, and how you can steer clear? Browse our full “Communications issue” of LAWPRO Magazine, available at www.lawpro.ca/magazinearchives.

Although not everyone likes it, voice mail is an essential tool. Used properly, it can help you better communicate with and serve your clients. To avoid frustrating clients, consider the following points for handling incoming calls from our Managing a Better Professional Services firm booklet,:

• Give callers the option to leave a traditional message: If your calls go through a receptionist, give the caller the option of leaving either a traditional message or a message on voice mail, so that those uncomfortable with or unwilling to use voice mail are not forced to do so.
• Be careful with call screening: If you don’t take a call after a client has been asked to identify herself you leave the impression you are avoiding the call. If you don’t want to be disturbed, put your phone on hold so the receptionist knows you are not available and can put the client directly to voice mail.
• Do your calls really need to go through a receptionist? Most clients will prefer having your direct line.
• Would call display help you? Many lawyers who have call display will tell you that they initially thought they would use it to avoid calls. In fact, they typically take more calls because knowing the identity of the caller allows them understand how much time will be involved in the call before they pick it up.

To be of maximum assistance to a caller, your voice mail message should:

• be updated on a daily basis, including details of your schedule;
• indicate when you expect to be back in the office (especially if you are away for an extended period);
• give callers an option to transfer to a live person (your assistant or the receptionist) if they need immediate assistance;
• encourage the caller to leave a detailed message; and
• state your policy with respect to how quickly voice mail messages will be returned (e.g. 24 hours, by end of the next business day), unless the message indicates you are away.

When you leave a message on someone else’s voice mail, make the most of it by:

• leaving a detailed message: give the information you want to passon or ask the questions you need answered;
  stating the date and time of your call;
• indicating if there are specific times when you will be available for a return call; and
• clearly and slowly stating your phone number: most people say their number much too quickly – go extra slow.
• This helps the person understand why you called and, depending on the circumstances, will enable him to get back to you with the information you require, even if he must leave a detailed message on your voice mail. If
  used properly, voice mail can eliminate telephone tag.

Humans communicate from the time they are infants until the day they die. At its heart, communication is all about the same thing – whether we speak, write, gesture, sign, listen, or tweet. It’s a way of telling someone something. So why, if lawyers have been communicating for as long as they have, are the majority of LAWPRO claims related to communication issues?

To read the article click here or on the image above. The article orginally appeared in the the Fall 2011 “Communication Breakdown” issue of LAWPRO Magazine. All past issues of LAWPRO Magazine can be found at www.lawpro.ca/magazinearchives

2013 is the first year 500,000 Canadians turned 60. It seems like a good time to revisit this article from five years ago, when the first edge of the Boomers were entering their seventh decade. It examines the implications for lawyers of this large and aging clientele.

Click here or on the image above to read this article from the Winter 2007 “Aging Boomers” edition of LAWPRO Magazine. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives

When providing independent legal advice, a checklist provides you with a handy tool to ensure that you are covering all the bases when discussing the underlying transaction and your client’s relationship to that transaction. Using this checklist, created by Phil Epstein Q.C., will allow you to be in a better position to successfully defend a negligence claim in relation to the provision of independent legal advice.

This article is by Nora Rock, corporate writer/policy analyst at LAWPRO.

As our readers know, the #1 cause of claims against Ontario lawyers practising in most areas of law is problems with lawyer-client communication.

Considering lawyers’ reputation for verbosity, this statistic seems counterintuitive, at least until you consider that some things are easier and more fun to talk about than others.

Fun to communicate with clients about: success (and our role in it); progress; winning; good news. NOT fun to communicate: failure (and our role in it); setbacks; losing; increase legal costs; bad news.

The risk: Failing to promptly and appropriately communicate bad news (and therefore, failing to take steps to mitigate setbacks) exposes lawyers to claims.

Uncomfortable delivering bad news? Here are some tips that can make it a little easier:

Do it immediately

When is immediately? The moment you understand the nature and implications of the unfortunate development. Do you now that a prospective client’s claim is unlikely to succeed the moment it’s been described to you at the intake appointment? Say so at that appointment. Have you just heard (or read) the words “motion dismissed”? It’s not going to be any less dismissed three months from now, and no, the client will not just forget you ever brought it… especially if you’ve also heard the words “with costs”.

There’s also a more personal reason to share bad news promptly: Carrying it around, undisclosed, in your own craw quickly accumulates an additional burden of anticipatory dread… it’s like a psychic burden with compound interest. Get it out and over with.

Explain thoroughly

If your client doesn’t understand the bad news, you haven’t communicated it well enough. Do not obfuscate. Do not use words like “obfuscate”. Provide a simple, thorough explanation of the development, the consequences (including economic consequences) and the client’s options for proceeding in the wake of the development.

Be honest about your role

There are two reasons lawyers often hesitate to deliver bad news:

The bad outcome is in no way the lawyer’s fault, but he or she just doesn’t like bringing people down.

While a positive outlook and empathy for the client are laudable, the client has the right to the information, and the lawyer has the responsibility to deliver it promptly. Delivering bad news is difficult. It’s important to remember that internalizing your client’s misfortune doesn’t help anyone. Inform the client immediately.

Much more often, a lawyer delays the delivery of bad news because:

The bad outcome is, at least in part, the lawyer’s fault.

Making a mistake is embarrassing. Covering up a mistake is unethical. When something goes wrong as a result of a decision or action on your part, communication is key.

When communicating about your role in a bad-news outcome, be honest but professional. On the one hand, an effusive apology, especially where you have made an honest error, is over-the-top and may come back to bite you in the event of a claim. On the other hand, a dishonest or incomplete response makes a claim more likely. Consider the following tips:

• Give a simple, factual explanation of what happened: “we lost the motion, and costs were awarded to the other side.”
• Do NOT deflect blame: “we would have won if we hadn’t gotten Judge XX. She’s a lunatic.” Or “if you would have remembered to tell me about XX detail, I would have put it in the pleading and we would have won.”
• If asked why results were different from what you’d hoped for or predicted, give an honest explanation: “My interpretation of XX (point of law, precedent, statutory provision, contract term etc.) was incorrect” or “I believed that we had a reasonable chance of success, because of XX reason, and so I recommended XX course of action. Unfortunately, we were unsuccessful.”

If you describe your choices in clear and objective terms, and you explain why you made the recommendations and choices you did, your actions have a good chance of seeming reasonable to the client. This is especially true if you were careful, before taking action, to explain that success was not guaranteed and to describe all the potential outcomes, positive and negative, including costs consequences.

Provide options

While the client may be upset by the bad news, you should attempt to provide a basic summary of his or her choices and options in light of the development. This will help the client to begin thinking beyond the setback. Let the client know that you will await his or her instructions.

Some people have trouble remembering anything that is said to them immediately after bad news is delivered. Be prepared to explain the client’s options again in a later conversation, after he or she has calmed down and has had a chance to absorb the information.

Await instructions (or worse)

Will your client terminate the retainer? Maybe, maybe not – but you have little control over the client’s reaction. If you made a small or honest error and the client terminates the retainer over it, he or she may be the kind of client who is not worth keeping. If your error could form the basis of a claim, you will also need to report the claim to LAWPRO.

If the client is a major or long-term client, and you have a track record of providing excellent service, appropriate communication of bad news is especially crucial. Long-term clients have a business relationship with you, expect honesty from you, and will often be able to put a mistake into proper perspective if their overall opinion of you is high. Handling setbacks appropriately, including by acknowledging your share of responsibility, may, in the long run, enhance your client’s trust in you instead of threatening it.

Regroup and de-stress

Lawyering is high-stakes, stressful work, especially when things go wrong. Once you have delivered the unpleasant but necessary message, reward yourself for doing the right thing by taking immediate steps to manage your own stress. Internalizing negative events helps no-one. Get out of the office and do something that makes you feel good.

A caveat: Two triple scotches and a pint of Ben and Jerry’s may make you feel good, but they won’t make you feel good about yourself. Lest you want to feel like a crummy lawyer AND a drunken sloth, find a non-destructive form of stress relief. Get some fresh air, play a game of tennis, talk the setback over with a close friend. Put it into perspective and move forward.

Learn from it

Dealing promptly with bad news doesn’t mean forgetting about it. Once the dust has settled, consider whether there are any lessons you might learn from the experience. Then file them away under “older and wiser.”

Clients can be demanding and will sometimes have expectations that will be unreasonable. Unmet expectations, even if they are totally unreasonable, are a recipe for unhappy clients. Setting and controlling client expectations is one of the best things you can do to ensure that you have a happy and satisfied client at each stage and the conclusion of a matter. Follow these resolutions to better set and control your clients’ expectations:

• I will carefully explain how the matter will proceed: While you may have handled a particular type of matter hundreds of times before, remember that your client is going through it for the first time. Make sure the client understands the process and steps that will occur as the matter proceeds.
• I will avoid legal jargon when explaining things to my clients: Don’t use legal jargon when explaining things to clients as it may confuse them.
• I will give the client a realistic indication of how long the matter will take: Clients will want their matter resolved as quickly as possible. Give them a true indication of how long the matter will take, and highlight any issues that might arise and delay a resolution of the matter.
• I will provide the client with a full picture of all costs and disbursements: Clients don’t want to spend money on legal fees and they will want to keep fees as low as possible. If you quote a range of fees they will remember the lower number. Give your clients a clear explanation of all fees and disbursements that they will or might incur. Be honest here – don’t quote a lower cost to please them. In the litigation context you should include a warning that they could be responsible for paying the fees of the opposing party.
• I will clearly explain to the client all possible outcomes or results: Clients always want a positive outcome to their matter. Unfortunately, not every client will get what they want. Make sure your clients have a clear appreciation of all possible outcomes, including negative or unpleasant ones.
• I will answer all my clients’ questions to their satisfaction: Carefully listen to and address any questions your clients ask. Do the questions indicate that they don’t understand something or that there could be another relevant issue you need to give advice on? Confirm the above information and advice in writing: In a personal meeting or phone call, unsophisticated and stressed clients who have worries and financial concerns may struggle to listen and understand what you are telling them. To avoid any possible confusion, confirm important discussions and advice in writing.
• I will immediately highlight for clients any unexpected changes that arise: Unexpected things can happen through the course of handling any matter. If something happens that will change the process, timing, costs or outcome of a matter, make sure the client is immediately made aware of the change and why it happened. Confirm this advice in writing.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

This article by Nora Rock (corporate and policy writer at LAWPRO) originally appeared in the Oct 19 issue of The Lawyers Weekly published by LexisNexis Canada Inc.

Though the rate of malpractice claims flowing from criminal cases is lower than in other areas of law, the number of claims in this area is on the rise of late, and for many of the same reasons we see in other areas. The most important cause? Issues with lawyer-client communication.

An area of particular vulnerability to error is the plea conversation. Consider the lawyer’s and the client’s different perspectives on the client’s account of the facts:

The lawyer: has listened to dozens, perhaps hundreds, of clients explain the circumstances leading to the charge(s). For an experienced lawyer, identifying the appropriate plea can become second nature. As he or she listens, counsel considers the client’s story against the backdrop of every previous client’s story, and the relative strengths and weaknesses of the particular client’s case become apparent.

The client: is describing the details of a prominent life event – circumstances that culminated in what may have been his or her first conflict with the law. He or she lacks the experiential context to put those events into broader perspective.

At the conclusion of the interview, the lawyer will make a prediction about the likelihood that client will be convicted and the range in which the sentence will fall. The client will often not have the experience to do so.

The result? The lawyer views the plea decision as a “no brainer”, while the client perceives it as a “shot in the dark”.

This difference in perspective is dangerous, because unless the lawyer takes the time to clearly and thoroughly explain his or her analysis of the case to the client, there is a risk that the client who chooses to plead guilty will regret that choice, and, believing that the lawyer “gambled and lost” by recommending a guilty plea, will make a claim against the lawyer.

Most defence lawyers understand this risk, but as their practices grow, they may not always take the time to provide a detailed explanation of their plea advice and the reasons for it. The temptation to assure the client that “your lawyer knows best” often arises.

Our experience with claims confirms that this temptation must be resisted. To avoid cutting communications corners, lawyers must remain disciplined and follow good communication procedures in every case, including:

• communicating detailed information about the implications of plea choices to the client;
• communicating the lawyer’s analysis of the client’s case (strengths, weaknesses, specific challenges, potential sentences) to the client;
• documenting the above two steps;
• advising that the client has responsibility for making the plea choice;
• making a plea recommendation; and
• documenting the client’s plea decision and instructions, along with details of any relevant discussion.

Is it essential to document plea instructions? Perhaps not, but failing to document appears foolhardy in the face of decisions like R. v. Dobson (2010 ONCJ 161 (CanLII)) in which the Ontario Court of Justice found that the client had likely given verbal authorization for a guilty plea, but overturned the plea anyway (and found that the paralegal agent had not provided competent representation) after noting that “…there were no proper written instructions.”

One of the realities of a busy criminal practice is that “meetings” between lawyer and client often take place in the courthouse, immediately prior to appearances. The prevalence of this practice does not make it good practice. In R. v. Walsh (2006 CanLII 7393 (ON CA)), a child pornography case, the court noted: “The lawyer’s communication with his client could have been much better. Brief meetings at the courthouse are not the most satisfactory way to communicate, particularly when counsel is handling as many as eight or ten cases a day.” It is also less likely that the content of such meetings will be appropriately documented in the client file. Whenever possible, and especially where charges are serious and the client is not in custody, take the time to discuss the plea at a meeting at your office.

When communicating about pleas, it is not sufficient to simply explain the terms of any joint submission that might be offered in exchange for a guilty plea. Counsel should also consider the impact of a guilty plea on the client’s way of life. This may include making inquiries about the client’s career and lifestyle aspirations sufficient to allow the lawyer to consider the impact of a criminal record and sentence on the individual client.

For example, a client who needs to travel outside the country (like a truck driver) may find her mobility hampered by even a minor drug conviction. A client who aspires to coach minor sports may be prevented from doing so if he receives an assault conviction. A client whose work requires him to work with vulnerable individuals or in finance may be hampered by any kind of conviction, as will a person who aspires to politics. While a lawyer cannot be expected to anticipate all of the potential consequences of a plea on a client’s future, the lawyer should at minimum urge the client to consider these contingencies.

Remember: If the client alleges that he or she was surprised by any consequence of the plea, you’re vulnerable to a claim.

Corporate/commercial law accounts for the third highest number of legal malpractice claims in Ontario, after real estate and civil litigation. An article in the January edition of the LAWPRO Webzine examines the causes of these claims in detail, and what tells lawyers what they can do to reduce their exposure to claim in this area of law.

Over the last ten years, corporate/commercial-related claims (including bankruptcy, tax, and securities-related claims) averaged 14 per cent of LAWPRO’s claims count (279 claims per year), and 23 per cent of our claims costs ($14.9 million per year). While there has been some fluctuation, the number of claims in this area has remained consistent over this time period, while the cost of resolving claims in this area has increased. On average, resolving a corporate/commercial claim cost LAWPRO $53,340 over that period.

As the the above chart shows, the main cause of claims against corporate/commercial lawyers is a breakdown in communications.

These errors fall into three general categories:

• A failure to inform the client or obtain the client’s consent;
• A failure to follow a client’s instructions; and
• Poor communication with the client.

A review of common fact scenarios for each type of error will give you a better understanding of why these errors happen and the steps you can take to avoid a communications-related claim.

Failure to inform client or get consent

The most common type of communications error on corporate/commercial files – 28 per cent of communications-related claims – involves a failure to obtain the client’s consent or to inform the client. Examples of this type of error include:

• Failing to explain to a client the consequences of a personal guarantee in a commercial lease, mortgage or other transaction involving security. Failing to make it clear that the client is personally responsible for the borrower’s debt.
• Failing to specify the limits of the retainer in writing. Failing to specify in writing which services the lawyer will perform and which things the client will do. For example, if you are involved in a transaction that includes the dissolution of a corporation, ensure that the client is aware of – and agrees to undertake – any final-year filings outstanding after the termination of your retainer.
• Failing to state in writing that a client has not provided sufficient information to complete the retainer on an incorporation and organization of a corporation. Do not allow the client to develop the mistaken impression that the incorporation is proceeding when it is stalled.
  Failing to set out in an accompanying letter the limited purpose of a draft document, together with instructions that it is only to be used for the specified purpose and may not be suitable for other purposes.
• Failing to clearly and unambiguously inform a client in writing that you are declining to act on a particular matter, either because of a conflict of interest or because you don’t practise in that area.
• Failing to recommend that the client retain another lawyer to handle that matter. For example, if tax considerations might influence the choice between two different courses of action, but you don’t have enough tax expertise to take these considerations into account, document your recommendation that the client obtain tax advice. If the client wants you to take a course of action without the recommended tax advice, document that instruction.
• Failing to clearly and unambiguously inform a client in writing that you are terminating the retainer and failing to recommend that the client find another lawyer. Failing to clearly and unambiguously spell out any tasks you will not be completing and that the client needs to do or retain another lawyer to do.
• Failing to inform a franchisor client about the disclosure requirements under the Arthur Wishart Act and the severe consequences of inadequate disclosure.
• Failing to inform a franchisee client about the disclosure requirements and rescission remedies under the Arthur Wishart Act.

Failure to follow client’s instructions

A “failure to follow client instructions” is the second most common communications related error and accounts for 35 per cent of communications-related claims. It really amounts to nothing more than a simple failure to follow a client’s specific instructions.

The most frequent scenarios for this error include:

• Failing to file the requisite notice of change form to remove the old officers and directors when a company is sold. (Failure to do so could, for example, leave the former directors on the hook for tax or other liability.)
• Failing to ensure that all the clauses in a commercial offer to lease are carried over to and appear in the final form of commercial lease.
• Performing additional services for the client that the client did not specifically ask you to do but doing so carelessly, for example, making unsuccessful or incomplete attempts to terminate existing tenancies on behalf of a vendor or purchaser in connection with a commercial lease transaction.

Poor communication with client

Poor communication with the client is the third most common communications-related error and causes 24 per cent of this type of error. Common scenarios for this error include:

• Failing to ensure that the client understands what you are telling him/her and that you understand what he/she is telling you, particularly if there is a language barrier.
• Failing to ensure that the client understands clearly what you will be doing as the lawyer and what the client is responsible for doing.
• Failing to establish clearly who your client is, e.g., where two or more family members have an interest in the transaction.
• Making assumptions about a long-standing corporate client’s intentions and instructions without confirming these in writing. A long-standing relationship is no substitute for clear communication.
• Failing to document in writing that a client instructed you to take a different course of action in a corporate transaction from the one you recommended.
• Failing to include restrictions on the use and applicability of your advice in an opinion letter, including details of any qualifications or limits to the opinion.
• Also, a failure to document the assumptions upon which your advice in the opinion letter is based.

AVOIDING COMMUNICATIONS ERRORS

As a means of avoiding communications-related claim, the value of carefully documenting instructions, advice, and steps completed cannot be overstated. While the failure to have written confirmation of instructions and advice is not negligence in and of itself, such written communication can be extremely helpful in defending you in the unhappy event that a claim is made against you (or you are the target of a law society complaint or you are defending your account before an assessment officer).

Why is having something in writing so helpful? Because more often than not, this type of claim involves the lawyer recalling that one thing was said or done, or not said or not done, and a disappointed or upset client who alleges something different. These claims are very hard for LAWPRO to defend successfully, because they tend to come down to a question of credibility. Judges tend to prefer the client’s evidence, as the client usually has a much better recollection of what transpired and what was said.

Remember, most clients are involved in relatively few corporate/commercial transactions in their lifetimes, and they are more likely to remember specific details about what happened. By contrast, lawyers who have handled hundreds of corporate/commercial matters often have little or no specific recollection about what happened on a specific transaction, especially one in the distant past.

Unfortunately, we frequently find inadequate documentation in the lawyer’s file to back up the lawyer’s version of what occurred. We frequently see files with no notes or correspondence documenting what was said and done, and on occasion, even files with no reporting letters whatsoever.

Communications-related errors are among the easiest to prevent. You can significantly reduce your claims exposure by documenting your work. Confirm the information that your client provided to you, your advice to the client, the client’s instructions to you, and what steps were taken on those instructions. Document the time spent reviewing the file and note what issues were discussed with the client. This documentation can take the form of notes to the file, marginal notes on draft documents, comments in interim or final reporting letters, or even in an email message. Admittedly, you can’t document everything on every file, but taking the time to document unusual things or issues that seemed to concern the client can be very helpful in the event of a claim, especially if you have a difficult or demanding client.

Some corporate-commercial lawyers do not track or docket the time they spend on files. This is a shame, as there are two benefits of doing so. First, by tracking lawyer and staff time, you can determine the actual amount of time you are spending on each file – a critical piece of information for determining the profitability of the transactions you complete. Secondly, even taking just a few seconds to make detailed dockets can be a lifesaver in the event of a claim. “Conference with client re need for more information to complete incorporation and organization of Acme Widgets” is much better than just
“Conference with client re Acme Widgets incorporation”; “Conference with client re consequences of signing personal guarantee in Smith Co. financing” is much better than just “Conference with client re Smith Co. financing.” Weeks, months or even years after a deal is completed, detailed dockets such as these can serve to confirm that particular issues were discussed with the client.

EVEN IF NO ALLEGATIONS ARE MADE…TELL US!

If you become aware of a potential claim, you should immediately report it to LAWPRO, even if no allegations of negligence have been made by your client. This is an obligation under the Rules of Professional Conduct and is required by the terms of the LAWPRO policy. Putting us on notice will help us help you understand what your claims exposure might be and may help reduce the damages on any potential claim. We may retain counsel to assist you and protect your interests and to make any necessary repairs. It is interesting to note that we close about 87 per cent of our corporate/commercial claims without any indemnity payments.

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You can’t totally eliminate the risk of a malpractice claim. However, you can substantially reduce your risk of a claim by improving your lawyer/client communications and documenting your work.