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    Wisconsin Lawyer
    July 01, 2011

    Managing Risk: Learn from Others' Mistakes

    In this malpractice-claims review, learn what common mistakes are being made – and how to avoid them.

    Thomas J. Watson

    Wisconsin LawyerWisconsin Lawyer
    Vol. 84, No. 7, July 2011

    When we’re out speaking to Wisconsin lawyers, one of the most common questions we get is, “What kinds of claims are you seeing out there?” That is always an interesting question and one that can generate a pretty lengthy conversation.

    It’s also a good question, because as Brian Anderson, claims counsel for Wisconsin Lawyers Mutual Insurance Co. (WILMIC), notes, “Claims experience can teach attorneys how to avoid legal malpractice claims. And of course, it’s much easier to learn from other people’s mistakes.” So, let’s see if we can answer the question.

    Practice Areas Generating the Most Claims

    Since the start of 2010, the top four areas of practice accounting for the most malpractice claims against Wisconsin solo and small firm practitioners insured by WILMIC have been the following:

    • plaintiffs’ bodily and personal injury (20%)
    • real estate (18%)
    • estate, trust, and probate (15%)
    • bankruptcy and collections (14%)

    Anderson points out, “These four areas of law involve either strict deadlines in terms of complying with the statute of limitation or precise filing requirements. When an error is made in these areas of law it is difficult or impossible to correct, frequently resulting in claims.”

    Practice Areas Generating the Most Payouts

    The areas of practice that generate most of the indemnity dollars paid by WILMIC follow in order:

    • plaintiffs’ bodily and personal injury (32%)
    • real estate (18%)
    • corporate and business organization (12%)
    • bankruptcy and collections (7%)
    • family law (7%)
    • estate, trust, and probate (7%)

    Predictably, higher indemnity dollars are generally paid out in claim areas that have the highest frequency. But Anderson adds that’s not always the case. “A notable exception to this trend involves claims in the area of corporate and business organization. Business organization types of claims are not as common; however, they tend to be very expensive to resolve when a claim does develop.”

    The Most Common Mistakes

    Now that we have established the areas of practice that generate the most claims and the most damages, let’s consider what errors are being made by Wisconsin attorneys.

    1) Failing to know or properly apply the law. This type of lapse accounts for the most frequent mistakes, making up about 14 percent of the errors documented by WILMIC. Anderson says these failures can happen for a variety of reasons. “The law is very broad. Lawyers should take the time to do the research and make sure they are applying it properly for their particular case and facts. Also, as we all know, the law is ever-changing. The courts’ interpretation of the law can change it. Do not assume that you do not have to keep up with caselaw. And of course, the legislature enacts new law every year – keeping up with those changes will give your client an edge and help you avoid claims.”

    2) Planning errors in the choice of procedure. This is the second most frequent mistake, accounting for nearly 12 percent of the errors lawyers have made over the past year and a half. Anderson says knowing the law isn’t enough.

    “Make sure you identify the right issue to get the right solution. Frame the question properly and identify your client’s goals – don’t just do what they ask and nothing else. The client may not know enough to ask about other options. You’re the expert. You need to be able to identify and communicate all of the viable options to help your client make an informed decision. You should also explain the benefits and drawbacks. Know where the client wants to be and why. And finally, write a good engagement letter, documenting what you can and cannot do for the client, making sure the client’s goals are realistic and reasonable. Forgetting or not doing some of this analysis and not asking the right questions of clients are often what get lawyers into trouble.”

    Thomas J. WatsonThomas J. Watson, Marquette 2002, is senior vice president and director of communications at Wisconsin Lawyers Mutual Insurance Co., Madison. Contact him at

    3) Inadequate discovery or investigation of a case. This is the third most common mistake lawyers have made, making up 12 percent of the errors reported to WILMIC. Anderson believes that this is a mistake easily made, even by experienced lawyers. “The client may not want you to spend a lot of time on the case in order to save fees. Then, when they are dissatisfied with the result, they suddenly ask why you didn’t do the discovery or investigative work that may have helped their case.” Anderson also notes that lawyers sometimes make the mistake of trusting the client to provide all of the necessary information. “Lawyers are busy and sometimes it is easier to rely on the client for information. That may be alright in some situations, but it can also come back to you in the form of a claim. You need to do some independent investigation or discovery yourself. If you take a case, commit to it, including investigation and verifying the facts. If you can’t make that commitment, you should not take on the case.”

    4) Failing to react to your calendar. This fourth most common error accounts for roughly 9 percent of the mistakes reported. If you add to this all the missed timing issues, including failure to know a deadline, failure to calendar properly, and procrastination, this category accounts for nearly one-fourth of the errors reported. Anderson says missed deadlines are most notable in personal injury cases. “Over 35% of all personal injury malpractice claims involve missed deadlines. It’s a major source of claims. Missing the statute of limitation is the most common mistake, but other deadlines can cause problems, too.”

    Why do lawyers miss statute-of-limitation filing deadlines? Anderson says there are many reasons. “Practicing out of jurisdiction has caused some confusion over what the deadline is. Handling claims involving municipalities, the state of Wisconsin, or individuals employed by the state or local governments creates challenges with unforgiving notice deadlines. Finally, clerical errors and procrastination are at the root of many of the missed deadlines we see.”

    Don’t Ignore Warning Signs

    Anderson believes there are warning signs that lawyers should not ignore, but often do. “There is the ‘I knew I shouldn’t have taken that case’ syndrome. Maybe they were uncomfortable with the client or the case from day one, but took the case anyway. Then there is the client who comes in who already fired one or two previous lawyers, or maybe one or two lawyers have already turned down the client’s case. That is another warning sign. Or, what about the client, or the client’s family, that has unreasonable expectations concerning the value of a case? Finally, there is the trap I think too many lawyers fall into. A case comes in at the last second, with a filing deadline looming, and the lawyer jumps right in trying to help the client with little time to do a thorough evaluation of the case before taking it.”

    Anderson often sees this happen in real estate matters. “The client comes in and says, ‘Just look over the paperwork for me to make sure everything is OK.’ Or they have a last-minute deal they need you to ‘approve.’ These can be real trouble down the road.”

    Conflicts of interest often surface in estate planning work, according to Anderson. He says, “Define your role carefully, especially when you have more than one person in your office at a time. Also, watch for problems arising out of being the ‘family lawyer.’ Maybe you have represented the family company for years; now the son runs it and wants you to do his will. Or one of the shareholders of a company you represent also wants you to do her estate planning. This type of representation can create a potential conflict of interest if a problem develops down the road.”

    Avoid Future Problems

    Finally, no matter what area of practice you engage in, there are things you should always do to avoid future problems. They include the following:

    1) Select the right clients for yourself. Learn to say “no” when necessary, especially when the client’s expectations or demands are unrealistic or unreasonable.

    2) Accept cases only in areas of practice in which you are competent (don’t dabble!).

    3) Listen to your staff.

    4) Don’t use puffery. Be realistic with your client about his or her case. Anderson says, “You are not a magician, you are a lawyer.”

    5) Practice good client communication.

    Maintaining good client communication may be the easiest thing you can do to prevent malpractice claims. Make sure your client understands you, and make sure you understand your client. Make that phone call. Write that email. Do not keep your clients waiting without letting them know what is happening on their case. If you are not in a position to give them new information, or you cannot get back to them immediately, tell them that. The more they understand about what you are doing for them, the better they will feel about their case and how communication is being handled. And of course, put everything in writing.

    When Things Do Go Wrong

    If you think you made a mistake, or a client tells you he thinks you did, there are some things you need to consider doing. Ignoring the problem and hoping it goes away is not one of them.

    1) Call your insurance carrier and discuss the issue. This does two things – it protects your coverage, and it might help identify ways to repair the problem.

    2) Organize and review your file.

    3) Tell your client what happened and the consequences.

    Taking no action usually makes the potential mistake worse. As Anderson observes, “A claim is a learning experience. Hopefully, the tuition will be reasonable, and remember, it may not turn out as badly as you originally thought. According to a 2007 ABA survey, fewer than 2% of all claims against lawyers result in a judgment for the plaintiff.”


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