"AvoidAClaim" Blog

“How long do I have to keep my closed files?” is one of the most frequent questions lawyers ask practicePRO.

Certainly you don’t have to keep all files permanently – this just doesn’t make practical or economic sense. Nor is the solution as simple as a one-size-fits-all rule for when to destroy closed files (e.g., toss everything at 10 years). For many reasons, file retention and destruction is a complex issue. This article examines why and provides some direction on how long you should keep your closed files.

To read the article click here or on the image above. The article orginally appeared in the the December 2010 “File Retention” issue of LAWPRO Magazine. All past issues of LAWPRO Magazine can be found at www.lawpro.ca/magazinearchives

The end of one year and the start of a new one is a time for self-reflection and self-improvement. Many of you will think about making changes in your personal and work lives. But while you all have good intentions, it can be difficult to break old habits, especially when you are running hard on the treadmill of a busy life and practice. So, to harness the good intentions you all have at this time of year we are going to post a daily excerpt from our list of “New Year’s resolutions for a healthier practice and a new you” that appears in the December 2012 issue of LAWPRO Magazine.

Some of the resolutions we have collected focus on specific areas of law. Others will help you with various law practice operation and management issues – and many will help you avoid or at least lessen the likelihood you will face a malpractice claim. A good number of the resolutions will have a positive impact on your personal life.

So watch this space over the coming days for resolutions:

• for better file and matter management
• to avoid litigation claims
• to better set and control client expectations
• to avoid real estate claims
• to better document your files
• to avoid corporate/commercial claims
• to avoid doing things that avoid clients the most
• to avoid family law claims
• to avoid fee disputes and make more money
• to avoid wills and estates claims
• to capture more time (and make more money)
• to avoid criminal law claims
• for stress relief, wellness and balance
• for a better practice

With small steps, over time, our resolutions can help you can make big changes. Good luck with your efforts!

In the paper world keeping client data confidential was easy and cheap. In the digital world, its difficult and expensive, and the job is never truly done.

The authors of Locked Down (Sharon D. Nelson, David G. Reis and John W. Simek) believe that law firms are not doing enough to protect electronic client data. The reason for this is a combination of ignorance of the IT world, expense and a belief that “it can’t happen to us”. As a result, law firms are being specifically targeted by hackers who consider them easy pickings.

This book is an attempt to explain the wide variety of information security risks facing law firms and how lawyers can best protect their data, whether they have a large budget or small. It covers such topics as:

• creating secure passwords
• working securely from laptops and smartphones
• developing information security checklists for your firm
• protecting mobile devices from theft

This is good reading to go along with practicePRO’s Managing the Security and Privacy of Electronic Data in a Law Office.

The practicePRO Lending Library is a free resource for Ontario lawyers of more than 100 books on a wide variety of law practice management related topics. You can see a full listing of our books here. You may borrow a book in person or via e-mail.

The practicePRO Library is located in our office at 250 Yonge Street, Suite 3101 in Toronto and can be visited during our regular business hours (Mon to Fri, 8:30 to 5:00). We invite you to come by anytime to peruse our selection. All titles in the practicePRO Lending Library can be shipped to Ontario lawyers at our expense, and returned at yours after three weeks.

If you would like to borrow this or any other book please email us. Most of our titles are also available from the ABA Web Store or the major booksellers here in Canada.

CBC is reporting that Facebook was hacked again. While it doesn’t look like huge numbers of accounts were compromised, it is worth changing your password to protect yourself.

And regardless of whether your account was compromised or not, changing your passwords regularly is one of the best things you can do to protect your online identities and accounts. You can learn about other password best practices in this article from Law Practice magazine.

The practicePRO Guide to Resources is a handy reference to all the risk and practice management material we offer, contained in a 4 page brochure format. We’ve recently updated the Guide, and a PDF version is available here.

The Guide introduces the reader to the main facets of practicePRO:

• The AvoidaClaim blog
• The practicePRO.ca website
• LawPRO Magazine archives and topical listing
• The “managing” series of booklets
• Wellness & balance
• The Lending Library
• Practice Aids
• The Online Coaching Centre

The back page features our Top 10 most downloaded resources in three categories: LAWPRO Magazine articles, precedents & checklists, and supplemental resources.

If you would like some copies for your office, just email us and we’ll mail some out to you.

In most areas of law practice, lawyer/client communication problems are the number one cause of claims, followed closely by deadline and time management issues. Together they typically account for more than half the malpractice claims LAWPRO sees. Failures to know or apply substantive law typically account for about 10% of claims. See The Biggest Claims Risks article for more detail about the most common malpractice errors.

So, while knowing substantive law is important, from a claims prevention point of view you get more for your risk management efforts by focusing on improving client communications and focusing on getting things done on time. With this in mind, here are my top tips for avoiding a malpractice claim:

1. Start out on the right foot with a written retainer: The retainer letter or agreement is your terms of engagement. It should clearly identify who the client is and what you are retained to do.
2. Get the money up front: At the time you are retained, get a retainer that is sufficient to cover all initial work that needs to be done on the matter. Replenish retainer funds before they are exhausted (set up your accounting system to monitor and remind you when the amount in trust is getting low). Stop working on the file if the retainer is not replenished – working on credit greatly increases the likelihood you will not get paid for your work. Of course, you can and should do pro bono work, but only when you choose to do it.
3. Control client expectations at all times: Clearly and accurately communicate to your clients the available courses of action and possible outcomes; all the implications of any decisions; how long thingswill take; and the expected fees and disbursements.
4. Document everything (almost): It is just not practical to document everything on everymatter, but you should document asmuch as you can in some contemporaneousmanner. Letters are fine, but e-mails, detailed time entries, andmarginal notes on documents can be equally effective. In particular, you want to record advice or instructions that involve significant issues or outcomes, and major client instructions or decisions. Documenting things is especially important when you are dealing with difficult or emotional clients.Memorialized communications help confirm what was said or done for the client in the event you ever need or want to look back to explain why or what work was done, to justify an account, or to defend yourself on a malpractice claim.
5. Meet or beat deadlines: Set realistic deadlines when it comes to completing tasks and/or delivering things to clients. Underpromising and over-delivering (i.e. earlier than promised) on work for clients will make them very happy. Don’t leave things to the very last minute as unexpected events beyond your control (blackouts, snowstorms, taxi got lost on way to file documents) will prevent things from happening as required. Giving yourself an extra day or two by setting your deadline before the real deadline can be a lifesaver.
6. Don’t do any of the things that most annoy clients: These are all the things that would equally annoy you. They include not returning calls or e-mails, long periods of inactivity, surprising a client with bad news or a large account.
7. Don’t handle a matter with which you are uncomfortable: If you are unsure or hesitant about handling thematter for any reason (e.g. unfamiliar with the area of law, a potential conflict exists, matter for a relative or friend, demanding or difficult client), get appropriate help or refer it to another lawyer.
8. Don’t wait until after the file is closed to ask how you did: Ask clients for feedback as thematter progresses, atmilestones or when interim accounts are rendered. Talk to major clients at least once a year, and do this off the clock!
9. What goes around comes around: Your reputationwill precede you. Be civil all of the time, to your client, the counsel and client on the other side, judges and court staff.
10. Send interim and final reporting letters: They should confirm what work was done, and the successes obtained for the client. For example: For example: Retainer terminated, futures steps, and so on.
11. Don’t sue for fees: This almost guarantees a counter-claim alleging negligence.
12. Document everything (almost): Read #4 again – it is the best way to avoid a claim.

Doing all these things will help you avoid the most common malpractice errors and ensure you have happy clients. And remember, happy clients don’t tend to sue their lawyers.

Cross posted on Slaw.ca and Lawyer Success Tips

My good friend Jim Calloway, practice management advisor for the Oklahoma State Bar Association, just added a fantastic post on his Law Practice Tips Blog.

Jim’s post, One Firm’s View of Client Expectations is about a South Carolina law firm that has decided to use its web site to make certain their potential clients have clear and realistic expectations about the firm before they even schedule an appointment. Check out the Client Expectations (Realistic or Unrealistic) section of their web page.

This page has statements I have never seen on a law firm’s website before: “We do not work on the weekends and do not provide emergency numbers for the weekends” and “Do not think we are perfect. We make mistakes.” Wow! Have you ever seen anything like this on a law firm website before? You should read the entire expectations page. There is a fair bit of general advice about family law and litigating domestic disputes. This page clearly sets out the rules of engagement for the client if they are to retain the firm to act for them.

In his post Jim says, and I wholeheartedly agree with him, that one of the most critical things lawyers need to do at the start of a matter is discussing client expectations and making sure that new clients have reasonable expectations. This is one of the best things you can do to lessen your exposure to a malpractice claim (there is probably nothing better for lessening your risk of a claim). A client with unrealistic expectations is probably not going to end up as a happy client, no matter how good the results. Lawyers want to achieve good results and also produce satisfied clients who will return for more legal work in the future and perhaps refer other potential clients to the lawyer.

It seems like this firm has made a strategic decision to say “If you are going to a high maintenance client, you’re probably not going to be happy with us and we’re probably not going to be happy with you.” Good on them. They will have happier clients, and they will be happier and less stressed lawyers.

Now, if you aren’t quite ready to put this kind of language on your website, at least put similar statements in your retainer or the initial letter to your client. For a precedent consider using some of the comments from these two documents, a retainer and billing information letter and a matter process and administrative information letter.

Thanks to Jim for bringing this firm’s client expectations page to our attention.

Cross posted on Slaw.ca and on the Lawyer Success Tips blog

I am pleased to add The Ethical Quandary blog to the AvoidAClaim blogroll.

The Ethical Quandary features posts on legal ethics and litigation issues by Michael Downeyand several other Hinshaw Culbertson LLP lawyers.

This blog has great posts on legal, ethics, discipline, risk management, and related business and professional issues, albeit with a bit of U.S. focus sometimes.

Do you know where the greatest risks of a malpractice claim come from? More importantly—did you know there are simple steps you can take to reduce the risk of a claim being made against you?

The July/August issue of Law Practice Magazine is devoted to helping you avoid the dreaded allegation of legal malpractice, as well as other dangers to your law practice.

LAWPRO’s claims statistics indicate that four out of five lawyers will face at least one claim during the course of their careers. So the odds are you have already experienced a claim or two—and if not, you likely will. Let’s call this the bad news. What’s the good news? Many claims are preventable. The surprise for most lawyers—and the key take-away—is that failures to know or apply substantive law do not cause the majority of malpractice claims. The other significant causes of claims are task and deadline management errors, lawyer-client communications issues and conflicts of interest. I review the common errors in our cover story, and explain how improving basic law practice management skills can reduce your risk of a claim. The Web Extra has details of The Most Common Legal Malpractice Claims by Type of Alleged Error for US and Canadian claims.

Conflicts expert William Freivogel brings us up to date on conflicts risks, and Malcolm Mercer walks through the steps law firms can take to implement risk management strategies. Chris Stiegemeyer explains what underwriters look for (and don’t want to see) when reviewing malpractice insurance applications—and he has tips to help lower your premium.

In terms of unpleasant things, difficult clients probably rank slightly behind a malpractice claim for most lawyers. Justice Carole Curtis, who practiced family law for 30 years, discusses how to protect your practice and sanity when dealing with different types of difficult clients, while Sheila Blackford describes how to recognize them. A note of thanks to Sheila for her assistance in putting this issue together as well.

To reduce exposure to other risks, be sure to read Jim Calloway’s tips for recognizing bad cheque scams, along with David Ries’s explanation of new and expanding obligations to protect confidential client data. With all the foolishness happening on the Web, the issue would be incomplete without a discussion of online dangers. Michael Downey guides us through the online trouble spots, with invaluable advice on avoiding liability. It can be a dangerous world out there.

It was great to have the opportunity to spread the claims prevention gospel to Law Practice readers – and to share it further with Avoid A Claim readers – and I hope this issue of Law Practice helps you stay out of trouble.

Cross posted on Slaw.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.