Whether you’re a solo practitioner of law or working with partners at a firm, having legal malpractice insurance will protect you from any unfortunate situations when a claim is made against you or your firm.

Mistakes are bound to happen and lawyers are liable for the decisions they make which have a direct impact on their clients personal lives and well-being. While some states may require legal malpractice insurance for attorneys, if you’re thinking about going without, understand the the consequences of being at the losing end of a claim against you can be devastating for your career.

This article will guide you through some of the benefits, considerations and examples of policies you can get to protect your legal services.

Why Purchase Legal Malpractice Insurance?

First and foremost, purchasing malpractice insurance protects you from any liability issues that can occur while performing legal services.

The cost of malpractice insurance for attorneys can come with a high annual premium. Depending on where you practice law, the area you practice, the years of experience you have, and the size of your firm, these are all factored into the annual insurance price.

Areas of practice such as real-estate lawyers and personal injury lawyers tend to pay higher premiums because these are seen as “high-risk” fields. Also, when a city has a higher number of malpractice claims, you can be sure to experience higher rates.

While he premiums may be extreme, especially if you’re a solo-practitioner or small law firm, malpractice insurance protects your reputation and personal indemnity.

For more detailed FAQs, please see the ABA Standing Committee on Lawyers’ Professional Liability 

What to Consider When Purchasing Legal Malpractice Insurance

Legal malpractice insurance for attorneys can cover many situations while leaving you liable for claims you may not see coming. When your considering which legal malpractice insurance to purchase, here is a few things you want to have in your insurance policy:

• If you’re outsourcing or using a virtual receptionist, can your policy provide protection against outsourcing risks?
• Does the policy protect all your staff and associates?
• Will the policy give you peace of mind and confidence to practice law?
• Does the policy legitimize your practice and build client trust?
• Will you be protected against claims of professional negligence?
• Does the policy cover the expense of hiring an independent legal counsel to represent you in the case of a complaint?

Another important consideration when choosing legal malpractice insurance would be the types of coverage you can receive. Each claim can have limitations of liability ranging from a few thousand dollars up to millions.

If a claim is made against your law firm, you may want to know if you’ll receive an increase in policy charges in future years.

Rates for Legal Malpractice Insurance  

The actual rates of your legal malpractice insurance will depend upon factors listed above as well as the answers to some questions you’ll have to provide.

Here’s an example of some of the questions you’ll be asked which will be used to calculate the cost of your insurance coverage:

1. How many claims or incidents have you had per lawyer per year?
2. What was the nature of the claims (i.e. frivolous, ordinary negligence, gross negligence, criminal conduct)?
3. What was the degree of fault by the lawyer, (i.e. clear malpractice, statute of limitations, vicarious liability [when a lawyer leaves the firm])?
4. Have you been rejected from other insurance carriers or was renewal refused previous insurance provider?
5. What is the nature of your practice (i.e. family law, personal injury, etc.)
6. What was your attitude / conduct with the client in resolving claims (i.e. attitude toward client)?

Insurance companies will examine your firm carefully to determine your eligibility and insurance premium rates.

Be prepared to share some of the intimate details of your law firm or solo-practice. You’ll have to share information like your attorneys professional conduct, history of previous claims, list of attorneys, their roles, hours worked, and more. Applications will vary from insurance company to insurance company.

Insurance Company Red Flags

Some of the major factors contributing to increased insurance premiums come from the following list of “red flags” which insurance companies are looking for.

1. 2 or more claims from the past year
2. 3 or more claims from the past 10 years (depending on the size of your firm)
3. Type of claim
4. Pattern of claims
5. Being uninsured the previous 5 years
6. Not paying a deductible
7. Not cooperating with client suing
8. Any bar disciplinary incidences
9. Continued business relationship with clients that previous sued
10. Possession of other professional licenses.

Researching the Best Legal Malpractice Insurance

The list above determining the rates of your insurance policy can seem daunting, you have complete power to research and find the best policy provider for your firm.

Performing your own due diligence and criticizing the fine details of the policy will be in your best insurance. Insurance policy providers is a business and the advertisements you receive in your inbox are simply trying to sell you on their premiums while not providing you the right coverage for your firm.

 In the case that you are rejected from an insurance provider, you can make any requested changes to the practices at your firm and reapply. There are plenty of insurance companies to choose from and comparative shipping will allow you to find the best price at the best coverage.

Insurance Updates & Renewals

Once you have selected the best legal malpractice insurance for you and your attorneys, you’ll have to continue to send any information to your insurer regarding changes to your practice.

If you hire on more attorneys or take on different kinds of clients, you may have to make changes to your policy.

When your insurance policy expires, you are responsible to make any necessary updates to avoid defrauding the insurance provider which can lead to legal consequences.

If you’re looking for a change in your law career that provides more freedom and flexibility, becoming a freelance lawyer could be it.

Life at a law firm isn’t for everyone. The working hours are long, the caseloads are stressful, and the working environments may not meet your ideals. Becoming a freelance lawyer allows you to choose which client projects to work on and who are your colleagues.

There’s no doubt that being a freelance lawyer has benefits. If this is the direction you want your legal career to take, keep reading to learn a few simple steps to get started.

Step 01: Decide Your Legal Services

The first thing freelance lawyers should do is decide what legal services they are going to provide their clients. At a law firm, associates and fellow lawyers must choose a single area to focus their practice. For a freelance lawyer, there’s a bit more flexibility.

When shifting your legal career toward freelance, it’s best to do some research before taking the plunge. If you decide to provide legal services in an area that is uncommon in your region, you can expect to go out of business pretty quickly.

Choosing the right area that has a steady demand will keep you in business longer as well as provide you with stimulating cases on the job.

Step 02: Register Your Services

Depending on your personal goals, you have complete control over the destiny of your legal profession. Once you have an idea of what you want to practice, the next step is to begin the legal steps to register your service.

Will you be a sole proprietorship? A limited liability company? Or, a corporation?

Understanding the differences between the three can help determine how you wish to operate your freelance legal services.

Step 03: Administrative Tasks

With your legal services registered, you’ll need other important elements to organize and maintain your administrative responsibilities. You may need a separate bank account for billing and tax-related purposes.

If you plan on working completely on your own and without the support of any legal assistants, consider using lawyer accounting software. Not only do these program help automate repetitive administrative tasks, they can also be used for the following:

• Calendaring
• Document management
• Invoicing
• Billing
• Payroll
• Time tracking

See a complete review of the best accounting software for lawyers.

Step 04: Network

Once you have laid the foundation for your freelance legal services, you can share your new service with your network.

Traditional lawyers working at a law firm tend to target individuals and other businesses for work. The clients you’ll often find as a freelance lawyer will typically come from other lawyers and law firms.

If you have a large list of contacts, this is the best place to start searching for business.

Alternatively, you can set up accounts on social networking websites to begin expanding your personal network. If you don’t have one already, LinkedIn is one of the leading social networking websites for all professionals. Other sites to network with lawyers and in-house job opportunities can be found here:

• My Practice
• Attorneys Online
• International Lawyers Network
• See more at lawyer’s on demand

If you want to join a social networking website rising in popularity check out Foxwordy. At Foxwordy, you can reach out and connect with other lawyers and contribute toward various projects in the legal industry.

Finally, if you haven’t done so already, you should join your local bar association and participate in as many local events as possible.

Step 05: Get a Website

Freelance lawyers with a website can offer a competitive advantage in the marketplace. Lawyer websites are a great way to showcase your services and allow for prospective clients to discover what you do.

Your website can feature some of your past legal projects and highlight your area of expertise.

If you decide to get a website, it is also important to understand how to use it in a way to benefit your business. If you’re on a tight budget, performing these local SEO methods can help more people find your services.

Or, if you some money to spend, you can try advertising your services using Google PPC or Facebook Ads. Both advertising choices have their own set of benefits and features.

Step 06: Start a Blog

Are you an expert in a particular area of law and want to share your knowledge with others? Starting a blog is a great way for freelance lawyers to make more connections with prospective clients.

If you’re unsure about the benefits of blogging about law, here are a few:

• Free service promotion
• Improves your website’s SEO
• Make connections with prospective clients
• Build a credible reputation online

It will take a bit of time and commitment for a blog to become a successful marketing tool. However, with these tips for lawyers who blog, you can get ahead of your competition.

Step 07: Be Patient

Becoming a successful freelance lawyer is not going to occur overnight If you decide to take this path in your legal career remember that it is going to require strategic planning, time, dedication, and most importantly patience.

Keep in mind that your legal services are much like a business and like all business, there is a chance of failing. The beginning will be some of the toughest moments until the momentum builds and your reputation spreads amongst your community.

Thinking about starting your own law firm instead of being a freelancer? Give this a read.

Whether practice big law and you’re looking for a break or you’re junior associate searching for your career path, becoming a solo practitioner comes with some unique perks.

Solo practitioners are considered to be private lawyers who work for them self at their own office or remotely. Typically, these lawyers handle almost all of the responsibilities required for their legal services and may occasionally hire legal assistance (i.e. clerks) for support.

If you’re considering your career path in law, here are 7 benefits of being a solo practitioner.

1. Complete Control

Since solo practitioners work for themselves, they’ll have more control over the direction of their service as a business. Not only should a solo practitioner be a great lawyer, but they should also have a strong sense of business as well.

Having control over the destiny of your legal services allows you to decide which client cases you take on and which ones you don’t. There will no longer be a need to seek approval before making a decision that affects a law firm. Instead, every decision you make will have a direct impact on your legal services as a business.

2. Diverse Clients

Working as a solo practitioner can allow for a greater diversity of client experiences. For example, lawyers who work at a firm and have been told to focus on criminal cases associated with violent crimes may not be able to specialize also in property crimes. In some cases, violent crimes and property crimes can overlap. Solo practitioners can have a greater flexibility in the areas which they practice.

If you’re the kind of person that enjoys new challenges in their work, being a solo practitioner offers just that. You can gain experience discovering which cases and legal situations you are more interested in and can later tailor your legal services to areas you are more interested and dedicated.

3. Cost Effective

There is a significant difference in cost of operations between big law firms and solo practitioners. Big law firms tend to have higher bills which cover rental expenses, staff, benefits, and more. Solo practitioners on the other hand usually operate out of a small office and may have few to no staff at all.

In regards to staffing, if you’re a solo practitioner that really wants to save, there are various lawyer software which makes operating your legal business more efficient and cost-effective. If you want to improve your intaking, you can hire a virtual receptionist or place some live chat on your website. Or, if you need something to manage your taxes and ensure invoices are sent out there are accounting software programs specifically for lawyers.

4. Benefits for Clients

Not only are there great benefits for being a solo practitioner but also for their clients. By reducing the overhead costs, solo practitioners can cut the total costs of their legal fees. In situations where a client may have to hire their lawyer for a longer amount of time can allow for more time and resources to be dedicated to a case.

One of the biggest influencing factors which affect someone’s decision to hire a lawyer is a price. If you’re able to cut your operating cost while providing legal services at a competitive price, you may be able to take on more clients. This can be very strategic for new lawyers searching for their first clients to get their name out there.

5. Work Environment

When you have the ability to design your work environment it can lead to a happier and more productive work environment. Solo practitioners have complete control over their working conditions. From the office space to the office supplies, everything is decided and designed by the lawyer in charge.

Creating the perfect office environment may come out of your own budget, but this will be the foundation of your legal services. Working from a place that suits your style and quality of service can set a strong first impression with your clients.

6. Custom Work Hours

Custom hours if often one of the most rewarding benefits for solo practitioners. Working at a firm, big or small, can create a high demand for a lawyer’s time both after hours and in the off-season.

By gaining more flexibility over your legal services, you can choose just how much, or how little, you want to work. If you want to take time off for vacationing or to attend a conference to further your professional development, you can. For those who have a family, being a solo practitioner allows for more time at home.

Having more time to focus on your legal services can also lead to better quality work. You can create strong marketing campaigns to find prospective clients that need your service. Or, if you have a website you can dedicate any extra time toward developing a blog and sharing your legal expertise to more people (see lawyer’s with a blog).

7. Higher ROI

 

The choice of becoming a solo practitioner may have a greater risk but it also involves greater reward. To emphasize the importance of having strong business skills, solo practitioners can work harder and see a high net gain.

If you’re working at a law firm, you may take on more client cases yet your salary stays the same. As a solo practitioner, the profitability of your legal practice will be based on your ability to find clients and handle their legal needs successfully.