Malpractice: More of it, and more costly

Legal malpractice claims have gotten more expensive. We think.

The claims that result in the highest of indemnity payments appear to be on an upward march, according to an ABA study unveiled this morning at the ABA’s national legal malpractice conference in San Francisco.

It’s just not clear how vigorous a march.

The fifth study of national legal malpractice claims put out by the ABA’s Standing Committee on Lawyers’ Professional Liability is based on 2004-2007 data from participating insurance companies.

Los Angeles attorney and committee chairwoman Edith Matthai, taking a few minutes for Legal Pad in the hallway of the Palace Hotel, noted the “significant increase” in multimillion dollar payouts in the past four years. The study found that claims leading to payments of more than $2 million had more than doubled, from 19 in the 2003 study to 44 in the latest study.

But she cautioned almost in the same breath that the findings of the whole study should be taken with a grain of salt. And the study itself (Get your copy here, 80 bucks!) goes to great pains to qualify its observations.

The study notes, for instance, that the pool of responding insurance companies has changed, that the number of reported claims has expanded dramatically, from about 30,000 last time to roughly 40,000 most recently, and that mid-size to large law firms are under-represented.

Matthai said that the data serves to raise questions and craft educational materials for lawyers to help reduce the number of claims, but adds, “We don’t have a lot of answers.” For instance, among the claims analyzed, personal injury claims against plaintiff attorneys went up but those on the defense side went down. “We don’t know why.”

The study also points out that plaintiff-side personal injury and real estate work have ranked as the two most frequent targets of claims since the first study in the 1980s. But it won’t commit to a conclusion there either. The study doesn’t account for how much time U.S. lawyers devote to each practice area.

—  Petra Pasternak