Claris Law Legal Blogging Community

Editor: Denny Thaxton
Profession: Legal Malpractice Liability

Category: Legal Malpractice News

As law firms have expanded geographically, merged with competitors, and entered new practice areas, many have adopted coporate-like governance structures, with Management Committees, Executive Committees or other small groups responsible for firm operations and decision making.

With these management structures come significant management liabilities, similar to those that threaten directors and officers of corporate enterprises. A broad claims-made policy covers any act, error, omission, misstatement, misleading statement, neglect, or breach of duty by an emplyee, partner, or associate acting in a management capacity for the insured firm. Here are couple of actual claims that were filed against law firm management.

Mismamangement: non-officer partners sued for mismanagement, claiming that the firm's decision to purchase a building with the intent to start a new practice resulted in significant financial loss for the firm.

Compensation: A non-officer partner sued claiming that the firm's recent merger compromised his practice and income.

Hiring: A third party, a rival law firm, sued a firm and its management for "predatory hiring," alleging wrongful acts in the hiring process.