The modern law practice remains in a state of transition. Attorneys continue to integrate more technology into the law practice while coping with the challenges of a continued economic slowdown.
Several notable decisions continue to shape law practice, with significant decisions on the horizon. In addition, the legal malpractice risks associated with various practices have changed, with some traditional high risk areas improving and other areas increasing in risk. Finally, the legal malpractice insurance market continues to offer opportunities for attorneys to expand coverage while maintaining their current premiums.
Here is how 2012 shaped up.
Technology and the Internet
Virtually every law practice has now integrated modern technology and the Internet. Undoubtedly, this has increased attorneys’ efficiency, with technology that can compare documents, paste boilerplate provisions, correct spellings and errors, and integrate calendaring into every aspect of the practice. Communication in the modern law practice has never been faster or more continuous. With 24-hour voicemail and email, attorneys find themselves on constant call.
With the changes, new risks have emerged. These include implied attorney-client relationships from email exchanges; risks to third parties who receive forwarded emails; and inadvertent disclosures to unintended recipients of emails. Most significantly, attorneys who rely on their inboxes for reminders now face a new kind of inefficient and dangerous calendaring system.
There are solutions for these and other risks. Some involve simple steps employing the very technology that creates the risks. For a few good examples, see Reducing email risks, Daily Report, July 3, 2012, http://bit.ly/WhVKfS. Others require attorneys to recognize that new risks require new solutions aimed at adapting to the technologically driven law practice.
One thing has become clear: it is no longer possible to just ignore new technologies in the modern law practice.
Georgia appellate courts in 2012 decided more than half a dozen cases involving attorneys and their duties and obligations. To sustain a legal malpractice claim in Georgia, a plaintiff must prove a duty, a breach of the duty, and proximately caused damages.
The area of legal malpractice law receiving the most attention, by far, was specifically causation. Various Court of Appeals decisions addressed the causation element in the transaction, litigation and probate contexts.
Causation is often the most complicated element of a legal malpractice case, with the plaintiff bearing the burden of proving that the outcome of a representation would have been different but for the attorney’s failure to perform ordinarily skillful services. Indeed, causation is the element that distinguishes a mere mistake from actionable legal malpractice. A mistake without proximately caused damage is not legal malpractice.
The Georgia Supreme Court decided the most significant case addressing causation in 2012. In Leibel v. Johnson, the court considered whether a plaintiff could use expert testimony to prove that the outcome of a representation would have been different but for the attorney’s conduct. The Georgia Supreme Court said no.
Leibel would not be the only time that the Georgia Supreme Court would weigh in on significant issues for Georgia attorneys.
In Villanueva v. First American, the Georgia Supreme Court granted a writ of certiorari in a case involving a representation in which a title company sought to sue a closing attorney for legal malpractice. Notably, the title company had no attorney-client relationship with the closing attorney. Instead, the title company asserted subrogation rights after it paid a loss on behalf of the lender. The title company insisted that such subrogation rights existed because, like any other claim, legal malpractice claims are assignable. The Court of Appeals agreed.
The possibility that legal malpractice claims could be assigned received much attention, with the State Bar of Georgia and others filing amicus briefs on the issue. The case remains pending.
The central issue is whether the legal profession is different from other commercial enterprises. If the same, then legal malpractice claims are presumably assignable like other contract actions. If different, then there are public policy reasons why legal malpractice claims should not be assignable. The implications of the Villanueva decision are significant.
The Georgia Supreme Court has decided to hear a third case of some consequence to Georgia attorneys. In Hunter, Maclean, Exley & Dunn v. St. Simons Waterfront LLC, Court of Appeals Judge Stephen Dillard wrote an exhaustive opinion addressing whether an attorney’s communications with a law firm’s in-house counsel were privileged. Judge Dillard concluded that such communications could be privileged if certain conditions were met.
The good news from the opinion was that it outlined the considerations for determining whether the privilege applied, and the steps that attorneys could take to make sure that their communications are privileged. The Georgia Supreme has granted certiorari, and the case remains pending.
The risks for claims
Data regarding the frequency and severity of legal malpractice claims from 2008 to 2011 was released earlier this year at the National Legal Malpractice Conference sponsored by the ABA Standing Committee on Lawyers’ Professional Liability, and the news was generally good.
Notwithstanding a slowed economy and a rapidly changing law practice, both the frequency and severity of legal malpractice claims have remained relatively constant in that time.
For plaintiffs’ personal injury attorneys, the news was good. There was a significant decline (about 5 percent) in the number of claims against plaintiffs’ personal injury attorneys during the three-year period.
For years, plaintiffs’ personal injury attorneys have narrowly beat real estate attorneys for the top spot as the practice area with the highest frequency of claims. Based on the new data, the top spot now rests solely with real estate attorneys, with more than one out of every four legal malpractice claims.
After those two, the balance of the top five practice areas for legal malpractice claims remains family law; estates, trusts and probate; and collection and bankruptcy.
One of the most significant increases was in collections cases, where the expanding exposure under various federal and state debt collection practices and statutes is having an impact. This exposure is compounded by the number of attorneys forced into the collections arena because their regular practices have been so severely hit by the down economy.
Legal malpractice insurance
Capacity within the legal malpractice insurance market continues to increase. This means there is no shortage of legal malpractice insurers.
The result creates both opportunity and risk for Georgia attorneys. Because of the number of insurers in the marketplace, Georgia attorneys can shop for the best coverage rates. Competition provides the best opportunity for keeping premiums down and/or negotiating coverage enhancements.
On the other hand, there should be good reasons before an attorney changes from an existing insurer. Changing insurers involves risks, including a possible gap in coverage or landing with an insurer who lacks the resources to adequately handle or pay claims. Be careful.