General Practice, Solo, and Small Firm Division The Compleat Lawyer
Winter 1998 © American Bar Association. All rights reserved.
Sleep Better at Night
Ten Ways to Prevent Malpractice
BY CYNTHIA OTERI BUTERA &
JUDY CANNELLA SCHOTT
Cynthia Oteri Butera and Judy Cannella Schott are Professional Liability Loss Prevention Counsel for the Louisiana State Bar Association and are employed by Gilsbar, Inc., in Covington, Louisiana..
One of the most stressful components of the practice of law is the worry about malpractice. We all know the feeling—you suddenly wake up at 2:00 in the morning, and you start thinking, "Did I add that critical language to my client's contract?" or "Did I subpoena that witness?" or "Did I calculate that deadline correctly?"
You toss and you turn and you start to sweat. You don't bother setting the alarm because you can't get more sleep anyway. You can't wait to get to the office so you can check your files. When you look in the mirror, you could bet that three more gray hairs have appeared on your head. Sound familiar? Wouldn't it be nice if you didn't have to worry so much? Well, making loss prevention an important part of your daily practice can help eliminate some of the worry.
1. Establish a Calendaring System
According to statistics, the number one error committed by lawyers involves calendaring. Missed deadlines—statutory, appellate, court-imposed, third-party-imposed, or self-imposed—have caused many lawyers grief, embarrassment, and malpractice claims. To minimize calendaring errors, it is crucial to promptly record all time-sensitive matters on at least two calendars.
Additionally, don't put off calendaring those deadlines that must be calculated. Adequately research and ascertain the applicable deadline and record it, keeping your research notes to back up your calculation. Any changes in calendared deadlines should be made promptly on appropriate calendars.
All deadlines that come by mail should be calendared immediately by the person who opens the mail (receptionist, secretary, or yourself). That person should initial and date each deadline on the document at the time it is calendared. This way, any subsequent reviewer of the correspondence will be able to ascertain which deadlines were calendared, and any missed deadlines can be caught.
Whether you utilize a manual calendar or a more complex computerized version, reaction to your calendar is critical. Your calendar should be reviewed daily and cross-checked with other calendars weekly. Moreover, if you carry a pocket calendar with you, make sure to check that calendar against your office calendar to verify that all entries are the same.
For example, a lawyer who did not cross-check her calendar with her secretary's was faced with a malpractice claim when she missed a deadline. She had calendared a deadline on the 19th and her secretary calendared it on the 9th. Suit was filed on the 11th, and it was subsequently discovered that the secretary's calendar was correct. A daily review by the lawyer and the secretary of their respective calendars, and a weekly comparison of the two calendars, could have prevented the error.
You may be meticulous about calendaring all deadlines, but if you fail to review your calendar frequently, you could easily neglect a legal matter and be faced with a malpractice claim.
2. Use Checklists and Forms as Loss Prevention Tools
A properly drafted checklist is a great loss prevention tool. It is recommended that checklists for opening and handling files be carefully prepared and include every action necessary for a particular matter, with a space to be initialed and dated by the person completing the task. Checklists serve as a prompt to perform the next task and as a general reference tool for the matter. Moreover, keeping a checklist within each file allows the lawyer and secretary to quickly ascertain the current status of the file by simply opening the file and glancing at the checklist.
Other forms can also be helpful in improving office efficiency as well as in preventing malpractice. For example, an index of pleadings form (organizing what has been filed, when, and by whom) can be helpful in keeping your litigation files organized. Additionally, inserting standard, well-thought-out language in firm letters and opinions can assure that certain matters are adequately qualified and limited.
Remember, forms can be (and have been) damaging if they are not carefully drafted, proofread, and periodically revised. Thus, all forms should be frequently reviewed and updated to reflect changes in the law and office policies.
3. Screen for Conflicts
A thorough conflicts screening should be conducted for each matter that you handle and a conflicts screening form should be completed and placed in each file. This form documents your due diligence in the prevention of a conflict situation. A master file list is an important element of a thorough conflicts check, as are a master client list and a closed file/client list.
The names of the potential new client; opposing counsel; spouses; third parties; and if a corporation, officers, directors, and subsidiaries should all be checked against your master lists. Conflicts screening should occur as new parties are added in a representation. Potential conflicts should be promptly addressed, and representation should be declined where appropriate.
4. Keep Drafts of Documents
Whenever you circulate a contract, deed, will, affidavit, or other legal document, save all versions of the document. Youmay need these prior drafts to prove how you arrived at the final work product, or to justify your course of action.
Each draft should be dated and placed in the file in chronological order. This will make it easier for you to ascertain exactly what happened during the drafting/negotiating process. In one instance, a prior draft of atrust agreement provided an excelent defense for a lawyer accused of not informing a client of alternative forms of a trust. The lawyer was able to produce his first draft of the document, which was exactly in the form that the client denied reviewing.
5. Confirm Significant Information in Writing
Significant information should be reduced to writing. You must determine what is significant. When you ask a client, third party, or opposing counsel to do something, or when someone else asks you to do something, decide whether it should be reduced to writing. All fee agreements should be in writing. Keep all of these original writings in your files. When it comes down to your word against someone else's, you will be much better off if you can back up your word with a writing. For example, many lawyers have been sued for malpractice when their clients get defaulted because an informal extension of time was not confirmed in writing.
Perhaps the most important loss prevention tools you can utilize are engagement, nonengagement, and disengagement letters. Engagement letters are a great place to set forth your relationship with your client, the facts of the case, your anticipated course of action, and your fee arrangement. A nonengagement letter confirms that you are not performing legal services for the recipient of the letter. It informs the "nonclient" that other counsel should be contacted immediately to protect the nonclient's interests, because
you do not represent that person. A disengagement letter informs a client of the conclusion of a legal matter. In some instances, the date of the disengagement letter has been held to constitute the formal termination date of the attorney-client relationship.
Written client consent should be obtained prior to any settlement. Additionally, the ramifications of any settlement should be completely discussed with the client and reduced to a writing signed by the client.
6. Take Detailed Notes
Whenever you talk to a client, third party, opposing counsel, member of the court, or any other person involved in a legal matter, take detailed notes of the conversation, date the notes, and place them in your file. Instruct your secretary and co-workers to do the same. Most lawyers have too much going on to rely on their memories to recall the many conversations that take place in a day. Moreover, detailed notes allow others to easily assist with files in your absence.
If you compute numerical calculations (proration of taxes, payoff amounts, tax statements for clients, interest amounts, etc.), save your detailed notes. Several months after a transaction you may have forgotten how you arrived at a certain figure. Saving your notes will save you both time and money.
7. Organize Your Files, and Keep Them in a Safe Place
All files should be properly labeled, contain a diary date, and be kept in a designated place. All documents within each file should be fastened to the file (e.g., hole-punched) in chronological order. Loose papers within a file result in lost documents. Finally, to facilitate accurate filing, eliminate paper clips. Paper clips tend to snag several documents that may not belong together, resulting in misfiled documents.
Every law office should use "File Removal Receipts" in place of files removed from their designated place. Even if you are a solo practitioner, you may forget that you took a file to review a few days back. File removal receipts should contain the "who, what, when, where, and why" of the file that was removed.
Also, files should be kept in a safe place while they are being reviewed—we have heard horror stories about files having been thrown away because they were stacked near a garbage can! If you have no file, you have no defense.
Finally, never give up your only copy of a file. A client does have a right to his file, but a lawyer has the right to retain a copy. You may need the contents of the file to defend yourself in a malpractice action.
8. Communicate with Your Client
Happy clients are less likely to sue you for malpractice. The biggest complaint clients have about lawyers is that they don't return telephone calls. Returning telephone calls, sending written correspondence, and having client conferences on a regular basis are recommended. Nonlawyer staff members can help maintain continuous contact with the client.
Every law office should make a conscious effort to effectively communicate with its clients. Clients like to be kept informed—they like to know what's going on, that their case is important to you, and that they are not being ignored. Enhancing client relations will not only control losses but also have the added benefit of promoting the law firm.
9. Communicate with Your Staff
Most administrative errors committed by lawyers, such as calendaring errors, misfiled documents, lost files, clerical errors, and lack of follow-up, can be eliminated with the assistance of competent nonlawyer personnel. Therefore, lawyers need totake the time and care to hire proficient and conscientious employees to assist them.
Additionally, lawyers must continuously communicate with employees and demand that the employees follow through and follow-up with all tasks. Staff members can assist lawyers in developing relationships with clients. However, employees must receive careful instruction with regard to communication with clients.
Finally, staff members should be informed and frequently reminded of the policies and procedures of the law office. Items such as confidentiality, docket control, neat and organized desks, attitude, and office etiquette should be discussed and reviewed with employees regularly.
10. Avoid Commingling of Funds
A lawyer's funds should always be kept separate from the client's funds. Commingling lawyer and client funds can lead to mapractice and disciplinary actions against the lawyer. Follow the guidelines in your state's rules of professional conduct for the proper handling of client funds.
Generally, a lawyer should maintain at least two separate accounts—one for the lawyer's funds (operating account), and one for the clients' funds (trust account). Only those funds belonging to the lawyer (such as earned fees and cost reimbursement amounts) should be placed in the operating account. Settlement funds, fee and cost advances, other client funds, and funds in dispute should be placed in the trust account.
Although no one can be guaranteed a claim-free legal career, you can take steps to minimize the possibility of a malpractice action being filed against you. Following these ten tips, along with the rules of professional conduct, should assist you with loss prevention. At the very least, you should be able to sleep better at night knowing that you are making a conscious effort to prevent becoming a malpractice statistic. Stay focused on loss prevention, and sleep like a baby.