New NSU Law study reveals legal malpractice trends in Florida
'Legal malpractice is an equal opportunity offender, it can hit any lawyer at any time. No lawyer should go to bed at night feeling safe. Clients are getting more litigious; society is getting more litigious.'
Robert Jarvis
A new study of legal malpractice in Florida shows that insurers pay an average of $154,000 per claim and that lawyers who are the subject of a claim pay an average of $11,000 in out-of-pocket expenses.
When it comes to being the subject of a legal malpractice claim, men far outpace women, 83% to 16%, and the average lawyer targeted by a malpractice claim has 22 years of experience.
“Legal Malpractice in Florida: A Statistical Profile,” by Nova Southeastern University Law Professors Robert Jarvis and Debra Moss Vollweiler, appears in the October 1 editions of St. Mary’s Journal on Legal Malpractice and Ethics.
The study is based on more than 4,500 claims reported by 100 insurance companies over a 44-year period.
The results were mixed.
Debra Moss Vollweiler
The bad news, Jarvis says, is that lawyers with Ivy League degrees face the same malpractice risks as lawyers from lesser-known schools. Practice area also makes little difference, he said.
“Legal malpractice is an equal opportunity offender, it can hit any lawyer at any time,” he said. “No lawyer should go to bed at night feeling safe. Clients are getting more litigious; society is getting more litigious.”
The good news, Jarvis says, is that most malpractice claims arise from behavior that is within the lawyer’s control.
“If you are doing all the things that we teach you to do in law school, you can avoid a lot of legal malpractice claims,” Jarvis said. “A lot of these are self-inflicted injuries on the part of the attorney.”
The study also debunks the theory that malpractice insurance isn’t worth the expense.
“For most of the lawyers in our study, their legal malpractice insurance policy appears to have worked as intended, shielding them from significant liability even when a payout to the other side occurred,” the report concludes.
Jarvis said lawyers should be encouraged by data that shows nearly 30% of malpractice claims resulted in no payments to the plaintiffs, a figure that indicates the claims lacked merit.
“The client had a bad case, or a weak case, and they should have taken the settlement offer, or they took a settlement offer and now they have buyer’s remorse,” he said.
The average malpractice claim took 2.9 years to resolve.
“However, a sizeable minority of claims — 979 (21.6%) — were resolved in less than one year,” the report notes.
The OIR website is a good tool for consumers who want to determine if a lawyer or law firm has been the target of malpractice claims, Jarvis said. But he acknowledged it’s not designed for more global research. Jarvis and Vollweiler had to ask OIR to download the data in bulk. They spent more than 1,000 hours paring 8,175 entries down to 4,533, to make a more meaningful comparison.
Many entries had to be discarded because they lacked critical information. There were other significant hurdles, Jarvis says.
For example, a claim against multiple attorneys is listed under each individual attorney’s name, “consequently, the reported number of claims is larger than the actual number of claims,” the study notes.
Some key data points are not required to be reported.
“While insurers are asked to provide the names of the individual lawyers — information that, regretfully, many insurers fail to provide — they are not asked for the lawyer’s gender, law school, or years of practice,” the report notes.
But after carefully filling in as many gaps as they could, the authors are confident of their findings.
“In a database as large as FOIR’s, consisting of information compiled over decades by innumerable individuals, complete consistency is impossible. Nevertheless, at every turn we did our best to ensure that we were comparing ‘apples to apples.’”
The average malpractice insurance policy in the study provided nearly $1.4 million of coverage. The highest, reported by a personal injury firm, was $50 million. The lowest, by a solo practitioner, was $5,000. When researchers removed the 6% of policies that provided $5 million or more of coverage, the average amount of coverage fell to $874,992.
In terms of payouts to plaintiffs, 29.9%, or 1,355 of the malpractice claims involved the insurer paying nothing to the plaintiff. In the other 70.1% of claims, the insurer’s average payout to the plaintiff was $154,139.
The study also looked at the out-of-pocket payouts by lawyers who are subject to a malpractice claim. In slightly more than 24% of the claims, the lawyer paid nothing.
“In the other 75.7% of claims, the lawyer paid an average of $11,757 (generally representing the deductible). The smallest amount paid by any lawyer was $1. The largest amount paid by any lawyer was $2 million,” the report found.
Only 1.4% of those claims involved a lawyer paying $100,000 or more, the study shows. When researchers removed outliers, the average amount paid by a lawyer dropped to $7,780.
It’s no surprise men are more likely to be targeted by a legal malpractice claim, the authors note.
“This disparity is at least partially explained by the fact that women did not begin attending law school in large numbers until the 1980s. But even by 2003 — approximately halfway through our reporting period — women represented just 29% of The Florida Bar’s membership.”
Other key findings:
- Florida’s seven-most populous counties accounted for 68.2% of the claims. “There is a very close correlation between county population and number of claims.”
- On average, the claims in the study involved a lawyer with 21.9 years of experience. Nearly 15% had fewer than 10 years of experience and slightly more than 7% had 40 or more years.
- A slim majority of lawyers, 50.5%, were sole practitioners. The remainder were from firms that had at least two lawyers.
- Because of data entry deficiencies by the insurers, the authors did not know the area of practice for 4.9% of the claims in the study. For the rest, they identified 27 discrete areas of practice. The top seven areas accounted for slightly more than 79% of claims. They were real estate law 23.5%, personal injury law 17.5%, probate law 10%, family law 7.9%, corporate law 7.4%, collections law 6.9%, and civil trial practice 6.2%.
The top two most common practice errors cited in the study were “missed a statute of limitations/other type of deadline,” 8.6% of claims, and “lack of diligence/failure to pursue claim, defense,” 8.4% of claims. The third most common, “negligent drafting,” accounted for 7.6% of claims.
The study should encourage lawyers and law firms to focus more intently on the intake process, Jarvis says.
“I think that every lawyer and every law firm should be sitting down and thinking about their processes, are we communicating well with clients, are we setting reasonable expectations, are we telling the client early on that things are not going well?”
