Why You Need a Settlement Planner

Over a thirty year legal career, the average lawyer is sued for malpractice three times[1].  Of the 40,000 claims for legal malpractice every year, 12,000 result in some recovery of money damages[2].  Between the last two studies performed by the ABA, there has been a 72% increase in the size of payments to settle legal malpractice claims (greater than $2,000,000)[3].

In every study conducted by the ABA over the last thirty years, plaintiff personal injury attorneys top the list of most frequently sued lawyers.[4] Of the 40,000 claims for malpractice, almost 9,000 of these claims were personal injury- plaintiff claims.[5] This means that just over one in every five legal malpractice claims are against a personal injury attorney.  Plaintiff attorneys are more than 539% likely to be sued than an average specialty and more than 736% more likely than personal injury defense attorneys.

Over 70% of all malpractice claims are against firms that consist of fewer than five attorneys.[6] Moreover, 37% of all these claims are against solo practitioners.[7]Malpractice claims for administrative errors are much higher.  Of all the malpractice claims for litigators, 47% were for a failure to timely file complaints.[8] This particular defect is an easy fix for most offices.

Of the 1,410,000 lawyers in the United States about 1,040,000 of those are in private practice.[9] There are roughly 117,600 complaints to bar associations each year.[10] That means that there is an over 10% chance of having a complaint filed against an attorney every year.  Of these complaints over 5,700 attorneys are publicly or privately sanctioned every year.[11] Over 15% of attorneys are sanctioned at least once over a 30 year career.[12]

The most common alleged error by claimants is failure to know or properly apply the law at 11.51% of all claims.[13] Of all the claims, 5.31% were for failure to obtain consent or inform client of legal procedures, and 3.22% were for failure to follow client instructions.[14] The situation is direr considering that fewer claims are being abandoned or resulting in no payment.[15] The claims that were abandoned or received zero payment dropped by 10% from 2003 to 2007.[16] Roughly 8% of all malpractice claims have stemmed from settlement or negotiation activities.[17]

Many of these malpractice issues may be avoided.  The most common claim, not filing on time, is fortunately an easy fix.  Attorneys should always use a proven calendaring system or a competent administrative team to avoid such errors.  As settlement claims are a highly vulnerable area for malpractice liability, attorneys should seek the counsel of a qualified settlement planner to educate clients on all the relevant tax, government entitlement, and funding issues of a settlement. Taking these steps, an attorney will avoid liability for the many of the most frequent malpractice issues entirely.


[1] Haskins, Paul and Kathleen Marie Evans, Profile of Legal Malpractice Claims, American Bar Association c. Sep. 2008, p. 1

[2] See Id. at 12.

[3] Haskins, p. 1.

[4] Haskins, p. 1.

[5] See Haskins, p. 4, Table 1.

[6] 1 Mallen, Ronald E. and Jeffrey M. Smith, Legal Malpractice 38 (2009 Ed.).

[7] Id.

[8] Id. at 401.

[9] Survey on Lawyer Discipline Systems, 2007. ABA Center for Professional Responsibility.

[10] Id.

[11] Id.

[12] Id.

[13] Haskins, Paul and Kathleen Marie Evans, Profile of Legal Malpractice Claims, American Bar Association c. Sep. 2008, p. 10.

[14] Id.

[15] Id. at 9.

[16] Id.

[17] Id. at 19.

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