The ABA released a report yesterday stating that legal malpractice claims for the period 2004-2007 are up four percentage points compared to the period 2000-2003.
I haven't read the survey, but I found this quote troublesome and perhaps just wrong:
I don't get it. Of those years, only 2007 was really down. 2004 and 2005 were gangbuster crazy. And that's why I think you see the uptick in claims.
As real estate values have fallen across the country, more individuals and businesses are suing their lawyers for bad results, according to panelists who discussed the findings of the 2004-2007 claims study during the conference’s opening plenary.
Here's the rationale. SO many deals were being done that for many it was impossible to keep up. So you cut corners. And those lawyers (and title companies) who did paid or are paying the price in litigation.
According to panelists, claims resulting from alleged errors in real estate transactions range from conflicts of interest, closing errors or contract drafting, to zoning or escrow issues. In many states it is not uncommon for only one lawyer to be at the closing table, presenting a huge potential for conflict of interest.I'm guessing, based on this, that many of these claims are for residential real estate. I could be wrong. But I doubt I am. Even though I specialize in commercial real estate, I do occasional work on the residential side and certainly know the drill.
The moral for us lawyers? Don't be greedy. Take on only as much work as you can handle competently. Have good staff and check their work thoroughly. And finally, remember that it is okay to be a little paranoid, especially if it keeps you from being served with a summons.