Last month, this column addressed steps that a firm can take to avoid disputes with and claims by clients.  Unfortunately, some claims are unavoidable.  Below are four tips for general counsel to consider when their law firm receives a demand letter, or an action is filed by a former client.

First, the firm should take steps to allow internal privileged communications about the claim.  Attorneys and staff should understand general counsel or a designated deputized general counsel will oversee the dispute for the firm.  They also should be reminded that internal discussions not involving the attorney overseeing the claim will likely not be privileged.  Written privileged communications should be filed separately from the client’s matter file to avoid confusion as to what work was performed for the firm and what work was performed for the client.  No attorney or staff time should be billed to the former client for investigating or responding to the former client’s claim.

Second, general counsel should secure claim-related evidence.  Either the IT department, if available, or attorneys and staff should search for and marshal electronic documents.  Automatic deletion protocols should be adjusted to ensure emails are not inadvertently destroyed.

Third, general counsel should report the claim to the firm’s malpractice insurer.  Legal malpractice insurance policies are “claims made” policies.  The policy definition of a “claim” may include notifications short of a lawsuit.  For example, some policies include a demand for free legal services as a claim.  Failure to report a claim during the policy period can give an insurer a basis to deny a claim.

Finally, the firm should consider the benefit of retaining outside counsel to respond to and defend the claim.  A firm may have attorneys with sufficient skills, but this is just one part of the equation.  The perspective of an outside attorney who routinely deals with lawyer malpractice claims can be invaluable.

Although each claim against a law firm is different, general counsel should consistently take the steps above to guide the firm through the process.

About the author:

John Sullivan is the Vice Chair of BASF’s Legal Malpractice Section.  He is a partner at Long & Levit, and a contributor to Long & Levit’s Lawyers and Judge’s Blog, www.longlevit.com/blog/, which is searchable by topic and case name.