Regardless of the nature of your firm's practice, today's lawyer and law firm is themselves ever more frequently the target of allegations of legal malpractice. While such claims used to be relatively rare (after all, most lawyers are reluctant to sue other lawyers), they happen today with increasing regularity. In fact, some law firms are now specializing in representing plaintiffs in legal malpractice cases.
	It's not just your clients you have to worry about, either: Federal and State regulatory agencies, corporate shareholders, even third-parties can and do file lawsuits accusing lawyers of all types of professional negligence. There have even been recent cases in which law firms have been targets of class actions, including RICO allegations!
	Sometimes, of course, this is the result of an honest mistake or misunderstanding. At times, it is a result of unreasonable or unrealistic client expectations; sometimes it is simply due to a misunderstanding or a failure to communicate; and of course, in some cases, the claim is false, frivolous . . . or outright fraudulent.
	Whatever the circumstances that result in a claim of legal malpractice, the reality is that such claims have risen significantly over the past 10 to 15 years, in terms of both sheer numbers, and the magnitude of the damages.
	Regardless of the size of your firm, it is critical that you protect yourself, your firm, and your personal and business assets, with a properly underwritten policy of lawyers' professional liability ("LPL") insurance. The best way - indeed, I would suggest that it is the only way - to be certain that you have the broadest possible coverage, tailored specifically for the nature of your practice, is to work with an experienced, independent insurance broker who specializes in this area.
	I am sure that you won't be surprised to hear me tell you that I am just such an insurance broker.
	My firm works with many different insurance carriers, all "A" rated or better by the A.M. Best Co., and all of whom are actively seeking to write lawyers' professional liability. Of course, some of these carriers would like you to believe that they are the "best." While it is true that some are better than others, the fact is that there simply is no one insurer that stands alone – the one is "best" for your firm may not be the same one that is "best" for the firm down the hall or across town.
	Primary LPL limits are available from as little as $100,000, to as much as $50 Million. Excess coverage can also be obtained to limits of $100 Million, or more.
	Deductibles or self-insured retentions range from as little as $1,000 for a solo practitioner, to as much as $100,000 for a good-size, financially sound firm. Some very large firms carry retentions of as much as $1 Million, which allows them greater flexibility in dealing with relatively small matters without involving their insurer, while protecting the firm and its members from catastrophic claims.
	Generally, small to midsize firms will most often have a deductible of between $2,500-$50,000, and policies vary in terms of whether claims costs are charged against the deductible. For instance, a common scenario might be for a firm to take a $10,000 deductible, but have it apply only to actual damages. Claims expenses would be covered on a "first dollar" basis. Some firms prefer the simplicity of one deductible amount, applicable to both claims and damages.
	Other scenarios might be a higher deductible for damages, but a lower deductible for claims expenses. Or, maybe what is referred to as a "50/50" retention, meaning that only 50% of the deductible amount will apply to claims expenses.
	Even more important is the question of whether claims expenses are including within the limits of liability or whether they are payable in addition to the limits of liability. Even when claims expenses are payable outside the limits of liability, some carriers the provide a specific, separate limit for defense (usually equal to the limit for damages), while some carriers are silent on the issue, which – theoretically, at least – means that claims expenses are unlimited. Obviously, before a carrier spends $1 Million dollars to defend on a policy with limits of, say, $250,000, someone is going to have some very serious settlement negotiations.
	Another important - and frequently misunderstood coverage issue is that of how to handle "lateral hires."  Many insurance carriers will customarily cover the attorney from the date of hire, on the assumption that the former firm's policy will respond to claims arising from the time that the attorney was employed by or a member of that firm.  Under certain circumstances, however, this can create a potential gap in coverage.  It is very important, therefore, that a law firm speaks with a knowledgeable insurance professional when hiring new associates or partners.
	All of these issues will have an impact upon cost of your insurance, though you should keep in mind that there are no "right" or "wrong" choices. It really depends upon what sort of coverage your firm wants, needs, and is comfortable with.
	Probably the key advantage that my firm offers our clients, is the fact that as independent insurance agents and brokers, we are not committed to "selling" the products or programs offered by only a single insurance company.
	In many states, counties and cities, bar association "endorsed" insurance programs are aggressively marketed. While there is nothing inherently bad about these programs, many attorneys make the mistake of assuming that their bar association's program is either the "best" or the least expensive insurance available to them. Not necessarily so!
	Programs such as these are generally "slot underwritten", which means that the underwriter's flexibility is limited, since each policy must be viewed as part of the program as a whole, rather than viewed - and priced - entirely on its own merits. This can result in the cost of less desirable insureds being effectively subsidized by others. While this might reduce the cost of insurance for the less desirable practice, it might then increase the cost for everyone else.  In other words, a classic example of potential "adverse selection."
	Remember, as well, that a program's endorsement is simply a marketing tool - nothing more; nothing less - and is often "bought & paid for." While there is nothing illegal or unethical about this, remember that some bar associations receive a fee for their "endorsement" in amounts of $1,000,000 or more per year from the program's underwriter. It certainly doesn't take a rocket scientist to figure out where all this money is really coming from. Can you say, "higher insurance premiums?"  My suggestion is that if you wish to make a contribution to your Bar Association, by all means do so - but don't do it by paying inflated insurance premiums!
	If the focus of your practice tends to be in areas of high-liability potential, such as IPO's, financial institutions, securities, patent, intellectual property, plaintiff's personal injury (by the way, did you know that plaintiff's P.I. is the #1 practice area in terms of malpractice claims?), etc., we know which underwriters and which carriers to speak with. I won't waste your time – or mine!
	If your firm's practice is focused in areas known to be relatively low in potential liability, such as criminal defense, well there are other underwriters and other insurers that prefer this type of risk, and are willing to price their products accordingly.
	Indeed, still other carriers are most comfortable insuring firms with broad-based, general practices. Some carriers love smaller firms, some don't. Some carriers are extremely competitive with firms of 25 or more attorneys, while some carriers get nervous beyond this point. Indeed there are carriers who really don't "shine" unless they are dealing with the larger firm of 50, 100, or even 500 or more attorneys.
	Maybe your firm is going through a period of tremendous growth; maybe you're opening branch offices in other cities, other states – or other countries. Maybe you're considering a merger, or maybe you've just dissolved a partnership. Some underwriters get really, really nervous about changes; others take things in stride.
	Any significant change in your firm should also be a signal that it's time to speak with your insurance professional to be sure that your coverage keeps up with your practice. It may not mean that changes are needed, but it is better to ask and be sure, than to discover an unintended gap in coverage after a claim is made.
	Associates,  of counsels, independent contractors, part-time government contracts (such as a municipal prosecutor), retired or semi-retired partners . . . all of these issues can have an impact on how best to insure your practice. Your firm's insurance broker should be fully prepared to advise you.
	Maybe you've experienced some significant claims problems, or maybe a disciplinary problem - and your premium has skyrocketed, or your carrier has dropped you altogether. Relax - I know which underwriters are particularly adept at dealing with "impaired risk" situations.
	The bottom line is that a "one-size-fits-all" approach to lawyers' professional liability insurance is simply unacceptable in today's dynamic and rapidly changing environment. Purchasing coverage for your firm should not be treated as an afterthought. Would you rather be doing something else? I'm sure that you would. I respect my clients' time, and I will never waste it.
	I have split this category into three subsections, depending upon the size of your firm. Click here for solo's to 4 attorneys, 5 to 25 attorneys, or 25 or more attorneys.
	Give me a call at, 877-320-4061, to discuss your firm's specific needs. All inquiries are held in the strictest confidence, and if it turns out that your best move is to keep the coverage you have, I will tell you so. You can click here and fill out a quick and easy form, which will be transmitted to me instantly, or you may also send me an e-mail at insurance@professional-liability.com.
	I look forward to speaking with you soon.

Bruce R. Swicker