Legislation: Lawyers Face Increasing Malpractice Suits

The owner of a mid-size hauling firm talked to four lawyers before finally finding one who was willing to handle the company's unfair competition claim against two local competitors.

After a jury verdict for the defendants, the frustrated owner began a new round of lawyer interviews - this time, for a malpractice claim against the lawyer who handled the unsuccessful suit. As the hauler saw things, if the first lawyer had found "better" expert witnesses, the company would have won the case.

These days, when things go wrong, a growing number of clients see their lawyer as just another deep pocket. They are frustrated by soaring legal costs, seemingly endless delays, unpredictable juries and, particularly, lawyers who fail to return phone calls or inform them on the progress of a case. As a result, they sue over every misfortune: soured business deals, adverse verdicts, failed appeals. And it's not just the overextended solo practitioners and small firms who are feeling the heat. The well-established "white shoe" law firms also are being hit hard with malpractice claims.

Of course, the phenomenon of clients taking lawyers to court is not new. Formerly, the reasons often were clear and unmistakable: missing a filing deadline or overlooking a key statute or court decision. Now, however, disgruntled clients will question and attack virtually any aspect of a lawyer's methods, strategy and knowledge.

Some observers see the sharp rise in suits against lawyers as just another dimension of the litigation craze. Many believe it's pay-back time for those lawyers who persuaded the public that every misfortune could be offset by finding someone else to blame. More significant, the number of suits against attorneys would not be soaring without corresponding numbers of lawyers ready and willing to sue their peers.

Legal malpractice suits have grown at such a pace that prominent legal registers and directories now provide state-by-state listings of plaintiff and defense specialists. These experts turn for help to a growing number of handbooks and professional newsletters chock full of helpful hints on how to bring and defend legal malpractice claims. Stoking the fires are appeals court decisions on legal malpractice, which increased three-fold during the 1980s and are expected to soar another 150 percent in this decade, according to The Wall Street Journal.

Perhaps the unhappiest group of legal malpractice plaintiffs are clients who lost cases after paying their lawyers handsomely. When a high-profile waste industry firm was sued for wrongfully terminating a top officer, it hired a nationally prominent labor law firm to defend the charges. After shelling out more than $700,000 in fees and expenses to try the case, the company was jolted when the jury awarded the plaintiff $900,000 in damages.

Reeling from the outcome, the company promptly fired the firm and hired other attorneys to sue the firm for malpractice and fraud. The company was particularly irked at having to pay legal fees out of proportion to what the case was worth. The case was eventually settled for an undisclosed sum.

When a law firm works on a risky high-stakes financial venture that eventually fails, the firm can expect to be sued. The usual rationale for targeting the law firm is that the lawyers should have been more active in protecting the interests of those who got "burned" in the deal, which, incidentally, can include others besides the client.

For example, after mismanagement by the operator, a resource recovery facility, which was financed through revenue bonds, was forced to close its doors. Already furious, the bondholders were frustrated further when the operator went bankrupt. In a desperate lawsuit, they lashed out at everyone connected with the project - particularly the sponsoring local government and its financial advisors. In turn, these defendants sued the project's bond counsel. As they saw it, the law firm should have been more aggressive in structuring the bond issue and in warning the local government and its financial consultant against going through it. The case is now pending.

Lawyers are learning what doctors and other professionals already know: they can find themselves in court without necessarily having done anything wrong. As a result, they now do for themselves what other professionals have learned from experience to do: screening clients more carefully, fully involving clients in planning and strategy and basting the relationship with tender loving care.