Claims Statistics

The statistics relating to legal malpractice claims are troubling. Once a rare occurrence, the frequency of legal malpractice claims has been on the rise.

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Malpractice insurers across the country have seen increases in the frequency of claims. While over half of all claims are closed without any liability payment and while the severity of the damages in claims paid has not increased, there is no escaping that the threat of a malpractice claim should be of grave concern to every practicing attorney. To illustrate, projections from the ABA indicate that new lawyers entering the practice can expect to face three malpractice lawsuits over the course of their practices. Claims data does show a number of enlightening details that can help understand the risks of facing a malpractice claim. Those statistics show that the number of years practicing is a significant factor. Contrary to what one might be popularly thought, it is not younger or older attorneys who have a high and disproportionate number of claims, but experienced lawyers in the 11-20 year experience level.

This is probably a function of several factors. There is typically some time lag between when malpractice occurs and when it is reported. Perhaps more pertinent, it is as an attorney's practice matures that they gain a level of responsibility that brings with it far greater professional risks. Traditionally, certain areas of practice have always been more risky than others. Plaintiff's Personal Injury practices have long been the riskiest accounting generally for a quarter of the claims made. Family Law, Real Estate, and Commercial Litigation generally follow. Other areas, such as Criminal Defense and Personal Injury Defense are relatively safe areas of practice. There is immunity from suit in some areas, such as Public Defenders, Prosecutors, Judges, and attorneys acting as "integral parts of the judicial process" such as court appointed receivers, arbitrators, guardian ad litems, or witnesses.

These sobering statistics show that every lawyer must be vigilant to prevent malpractice. Nearly 40% of the claims made deal with administrative or procedural errors that are easily avoided. Attention to proper office systems - calendaring, tickler, file management, and accounting systems - and time management, would alleviate most if not all of those administrative and procedural claims. Even the best of systems, however, is useless if there is not a will to use them. The profession has become increasingly aware of the fact that depression, alcoholism and job dissatisfaction is a problem of paramount significance. Johns Hopkins ranks attorneys first amongst occupations for prevalence of depression. The bar has taken steps to start addressing the problem. However, this is only a start and a range of concerns from simple job dissatisfaction to depression & chemical dependency are without doubt substantial contributors to malpractice in the profession. Though there are no studies directly chronicling its influence, but it is not difficult to extrapolate from the incidence of depression that many of the malpractice lapses by attorneys are not just the result of faulty office systems but are fueled by an underlying psychological disjunction. A proper risk management program for any lawyer or any law firm must take into account the totality of the practice. Proper client relations and office systems are essential. The personal and psychological side of practice, however, cannot be ignored. Failure to attend to either is running a substantial risk of facing a malpractice lawsuit.