COVID-19 has pushed many lawyers to quickly transition to a remote work environment and digitize their law practice. The swift and drastic transformation of the legal profession has created new risk management challenges for lawyers as they navigate different ways to run their business and deliver legal services. This blog post will explore some of the risks lawyers face when trying to get new clients and retain existing ones during the COVID-19 era.
HoardingAs the pandemic hit Oregon in March, some lawyers found their business dwindling, while others were laid off. Anxiety about their financial future may lead lawyers to hoard legal work from existing clients. Hoarding isn’t limited to household items. It also includes a phenomenon I’ve written about in the past called data hoarding by lawyers and law firms. The hoarding of legal work stems from a sense of urgency or uncertainty. It looks like this: an existing client calls her transactional lawyer with concerns about making some changes to her company due to COVID-19. The client may need to close a plant and lay off a few employees. Typically, that transactional lawyer would refer the client to the firm’s litigation or employment department or another suitable lawyer within the firm. Hoarding occurs when lawyers decide to keep the new business for themselves and not pass it along to even their colleagues in the same firm due to concerns about their own billable hours and financial stability. This action can expose lawyers to malpractice liability when they make a mistake on a client’s new matters, due to the unfamiliarity with handling that particular subject matter.
DabblingDabbling is just as risky as hoarding—if not more so. It occurs when a lawyer’s existing practice area has dried up and the lawyer decides to expand into areas that are now in high demand, such as contract disputes, insurance work, or employment issues related to COVID-19. The lawyer does some research in that practice area and feels that he knows enough to start taking those cases. This “knowing enough” may not help the lawyer evaluate the time and effort it will take to handle the new case. A false sense of confidence may actually lead the lawyer to underestimate the skill, knowledge, and preparation required to competently represent the client. Dabbling in a new practice area is dangerous and exposes lawyers to mistakes and errors resulting from having inadequate experience in the law or inadequate preparation.
Relaxing FormalitiesThe effort to get new clients may also lead lawyers to relax their client screening and intake procedures and other professional formalities. Lawyers may be tempted to provide legal assistance on the spot or without formally opening a file and running that person through the conflict system. It doesn’t help that we can all now work in our pajamas, with kids screaming or a dog barking in the background. A certain level of informality helps everyone adjust to the new ways of doing business. But the informality should not extend to client screening, conflict checking, and intake procedures. Ignoring red flags and disregarding protocols will certainly make it easy for someone to become a client now, but it may bring trouble to the lawyers later on.
Doing It RightThis doesn’t mean that lawyers shouldn’t venture out of their existing practice areas. But it does mean that hoarding, dabbling, and relaxing formalities bring malpractice risks that lawyers should minimize to avoid future problems.
Use screening toolsOne way that lawyers can minimize their malpractice risk is to use tools to help them better screen clients and cases. These tools include checklists, forms, or questionnaires to help lawyers identify red flags and evaluate the risk of taking on a new client. Some red flags include:
- Client had multiple prior lawyers for the same matter – This may indicate a problem client, a non-paying client, or a case with serious flaws (lacks merit, no evidence, no witness, etc.).
- Client is motivated by revenge, a feeling of victimization, or other extreme emotions – This may indicate that the client has her or his own agenda and may be difficult to work with.
- Client waited until the last minute to look for a lawyer – This may be a signal that the client is unprepared, not proactive, and may not cooperate or respond to your requests for information, thus preventing you from performing competently.
- Client has unrealistic expectations that cannot be managed – This may indicate that the client will be difficult or impossible to please, second-guess your legal advice, impose unreasonable demands on you, and will not be satisfied with the result, no matter how good.
- Client expresses difficulty or inability to pay fees – This may be a sign that the client will not pay on time or at all, will likely dispute the bills, will expect you to advance costs, and will blame you if anything goes badly.
A sample client and case screening checklist is available here.
Associate with another lawyerAnother way that lawyers can help minimize the risk of making errors when practicing in a new area is to get a mentor or associate with a lawyer experienced in that field. It may be difficult for lawyers who are looking to handle COVID-19 cases to find another lawyer experienced with this pandemic because it is, in many ways, unprecedented. However, many lawyers can transfer their experience and knowledge handling other types of crises − such as the 2008 economic downturn − to the circumstances of today. If you cannot find someone who can mentor or help guide you, seriously consider just sticking with what you know. It’s better to be safe than sorry.
Use written engagement lettersAnother way to minimize liability exposure is by using a written engagement letter to define the scope of your representation and who the client is. Unless you clarify who is not your client and what you have and have not agreed to do for the client, you run the risk of being sued by those who are not your client and for matters that you didn’t agree to undertake.
For additional tips on managing your malpractice risks of practicing during this pandemic, watch our CLE on the topic.