If it's true that the measure of any successful compromise is that few are fully satisfied, then the California State Bar's Board of Governors cooked up a good deal on malpractice insurance.
The board voted 16-4 on Friday to finally approve new rules on coverage disclosure, an issue that's been festering there for two years. Under the compromise -- which still must be approved by the state Supreme Court -- lawyers who expect to bill a client for more than four hours must pipe up if they aren't covered for malpractice.
The disclosure idea rankled some small firm and solo practitioners, who thought it put them at a disadvantage vis-a-vis larger-shop lawyers who are more likely to be covered. In 2006, the California Bar Journal printed an estimate that 20 percent of the state's lawyers in private practice don't carry insurance.
While some governors would have preferred no disclosure at all, the compromise gained support from them because they felt it better than more far-ranging alternatives.
Auburn, Calif., solo John Dutton supported the deal after he voted against an earlier slew of more aggressive disclosure requirements recommended by a task force. Those proposals included noting a lawyer's insurance status on his or her Bar Web page.
Last fall, the Board of Governors split on the task force recommendations; then-president Sheldon Sloan broke the tie with a no vote. Three governors opposed to any disclosure still voted against the compromise last week.
"I sympathize with that, but I don't know how the board would have gone [had there been no deal]," Dutton said. "This has been a divisive issue for the Board of Governors."
The four-hour exception was designed to assuage concerns that casual solicitations for advice -- say, at a cocktail party -- would turn comically formal when the lawyer says he can't answer without issuing a coverage letter.
Board Vice President James Penrod, of Morgan, Lewis & Bockius in San Francisco, strongly supported the task force recommendations and voted for the compromise, even though he didn't like the exception.
"Four hours is enough for something to go wrong," Penrod said.
John Peterson of Fresno voted no because he wanted to see the Web page idea implemented, and not just for public-access reasons. Forcing a lawyer to disclose lack of insurance while interacting with a client -- instead of passively on the Web -- introduces an "irritant" into the attorney-client relationship, Peterson said, right at the time when a lawyer is trying to build trust.
But some on the board were happy. State Bar President Jeffrey Bleich said the compromise merely reflects an old statutory system that required insurance disclosure, but had lapsed.
Web disclosure would have gone too far, he said.
"I think the only people who need know about insurance status are people contemplating retaining you as their attorney," Bleich said. "One problem with the Web site is competitors or other folks could look it up and draw inferences from it."
The Bar president said he was happy solos and small practitioners were not left out of the ultimate decision making.
"My general view is that this was a very healthy process overall because all views were heard," Bleich said.
