Many claims are preventable, often with very little effort. The following is a list of the top 15 proactive steps you can take to avoid a malpractice claim.
Start out on the right foot with a formal file opening procedure and a written retainer: Every new client should go through a standard file opening procedure that includes client/matter screening and a conflicts check. If you are going to act you should prepare a retainer letter or agreement that sets the key terms of engagement for the matter. It should clearly identify who the client is and what you are retained to do, and in particular, any limitations on the scope of the retainer. Consider including a provision that describes your firm’s policy on disbursing money from your trust account, in order to protect yourself against counterfeit check fraud: Put the client on notice that you reserve the right to hold funds for a specific time period or until you are sure they have “cleared.”
Don’t dabble or handle a matter you are uncomfortable with: If you are unsure or hesitant about handling the matter for any reason, get appropriate help or refer it to another lawyer. Send the matter away if you are unfamiliar with the area of law, a real or potential conflict exists, the matter is for a relative or friend and you are not able to be objective, or the client is very demanding and difficult.
Get the money up front at every stage of a matter: At the time you are retained, get a retainer that is sufficient to cover all work that needs to be done at the initial stage of the matter. Replenish retainer funds before they are exhausted and at the start of each stage of a matter or file. Configure your accounting system to remind you when the amount in trust is getting low relative to the work in progress on the file or when the accounts have not been paid within 30 days. Stop work if the retainer is not replenished or accounts are not paid on a timely basis. Working on credit with a growing A/R greatly increases the likelihood you will not get paid and the potential for a malpractice claim. (This is especially important for plaintiff litigation, where you could find yourself in the middle of a malpractice claim due to an administrative dismissal of the action. If the retainer is not replenished, get off the record in a timely fashion.)
Control client expectations with good communications at all times: Clearly and accurately communicate to your clients the available courses of action and possible outcomes; all the implications of any decisions or actions; how long things will take; and the expected fees and disbursements. Immediately advise them if changed circumstances affect any aspect of your initial advice to them.
Document (almost) everything: It is just not practical to document everything on every matter, but strive to document as much as you can in some contemporaneous manner. Formal letters are fine, but e-mails, detailed time entries or marginal notes on documents can be equally effective. In particular, record advice or instructions that involve significant issues or outcomes, as well as major client instructions or decisions (especially with respect to settlements). Documentation takes on a greater importance when dealing with difficult or emotional clients. Memorialized communications are invaluable to confirm what was said to, or done for, the client in the event of a malpractice claim. Make sure nasty or embarrassing comments never appear in your client files or records.
Meet or beat deadlines: Set realistic deadlines for completing tasks and/or delivering documents or advice to clients. Under-promising and over-delivering (i.e., earlier than promised) on work for clients will make them very happy. Don’t leave work to the very last minute as unexpected events beyond your control may intervene and lead to missed deadlines (e.g., blackouts, snow storms or a sick staff member). Give yourself a margin of safety by setting deadlines a day or two early.
Delegate but supervise: Delegation is an essential part of running a practice, but make sure there is appropriate supervision and review of junior lawyer or staff work.
Check back next month for eight additional risk management tips.
Dan Pinnington is the Vice President of Claims Prevention at practicePRO. This article first appeared in the “15 Years of the practicePro Program” issue of LawPro magazine. Reprinted with permission. For more risk management resources, visit www.lawpro.ca.
About the Author
Dan Pinnington is the Vice President of Claims Prevention at practicePRO. This article first appeared in the December 2013 issue of LawPro magazine. Reprinted with permission. For more cyber safety tips, visit www.lawpro.ca.