Wednesday, February 15, 2012

Risk News: Law Firm Insurance Trends, Ethics and Disqualification Updates

The Wall Street Journal published an interesting update on law firm insurance and malpractice trends: "The Wrong End of Lawsuits: Firms Say They Increasingly Are Targets of Litigation by Clients, Ex-Partners." The article reviews several high profile malpractice cases making news (such as an $83 million lawsuit against Ropes and Gray) and digs into several identified insurance-related themes and trends:
  • "Law firms are loading up on insurance against expensive liability claims as they increasingly find themselves on the wrong end of lawsuits."
  • "Some clients are even using the threat of litigation as a way to negotiate their bills."
  • "And because big law firms carry more insurance than smaller firms, the big practices are particularly attractive targets for litigation."
  • "Insurance brokers say many law firms have expanded their coverage to guard against claims from former employees or disgruntled partners and are looking to shield firm leaders from suits over management decisions, such as whether to merge with other practices."
The Wall Street Journal published an interesting update on law firm insurance and malpractice trends: "The Wrong End of Lawsuits: Firms Say They Increasingly Are Targets of Litigation by Clients, Ex-Partners." The article reviews several high profile malpractice cases making news (such as an $83 million lawsuit against Ropes and Gray) and digs into several identified insurance-related themes and trends:

"Am I My Brother's Keeper?" -- BNA writes: "Law Partners and Managers Must Be Active Overseers of Colleagues' Conduct," a recent published updates to the ABA/BNA Lawyers' Manual on Professional Conduct:
  • "Model Rule 5.1, which covers partners and managers in all types of law practices, requires supervisory lawyers to take affirmative measures to prevent and detect unethical conduct by lawyers in their firm, office, or agency. Those who own and manage law practices are expected to construct and maintain a framework to make sure that other lawyers in the firm toe the ethical line."
  • "Model Rule 5.2 makes clear that subordinate lawyers who act unethically aren't off the hook merely because they followed a supervisor's instructions. Attorneys working under the supervision of other lawyers are charged with learning the rules and laws that govern their conduct; they cannot blindly rely on instructions from those above them who push the boundaries of professional conduct."
  • "Law firms must set up and maintain internal policies and procedures to prevent and detect unethical conduct, including measures designed to spot and resolve conflicts of interest, to foreclose and uncover fraudulent billing and improper dealings with client funds, and to identify key deadlines in pending matters and verify they are met. Firms also must have policies and practices ensuring that lawyers receive appropriate training, supervision, and support needed to carry out their work. Model Rule 5.1 cmt. [2]; Restatement §11 cmt. g."

Finally, in keeping with the legal ethics theme, and, arguable from the lighter side, comes an update in developments in the disqualification motion in Wingate v. Celebrity Cruises, Ltd. The complete decision, filed February 8, is available online, but the following transcript snippet summarizes part of the drama involved:
  • "THE COURT: I am not going to give this man a nickel if I already found, as I have, that in fact he obtained an unfair advantage by bribing an employee on the other side to let him know what the settlement value of the case was."

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