This article originally appeared in the Vol. 15 No. 2 issue of CQ - Claims Section Quarterly, and is reprinted with permission of the CPCU Society.
Legal Malpractice: Risk
Reduction that Makes Sense
by Howard Yellen, J.D.
Imagine an insurance company offering 5 to 25 percent discounts to drivers who claim to be good drivers--no DMV record check required. Absurd? Perhaps in auto insurance. But this is precisely the way business is done in the legal malpractice arena.
More than half of the carriers who write legal malpractice policies give 5 to 25 percent discounts to lawyers and law firms that use computerized systems to schedule their calendars. Carriers justify such discounts because more than half of all legal malpractice claims arise out of missed court dates and deadlines. Presumably with computerized calendars such blatant mistakes, which make malpractice cases particularly easy to prove, are less likely to occur.
The problem is that there is an enormous difference among calendaring programs. Some provide great protection against missed dates and deadlines. Others are no more efficacious than paper calendars or date books. But legal malpractice carriers tend to give discounts based entirely on a firm's affirmation that it has a computerized calendaring program, regardless of whether it provides any real protection against malpractice.
My premise is that carriers can significantly reduce their exposure to legal malpractice claims if they provide discounts only to firms that use effective legal calendaring programs that automatically schedule lawyers' calendars in accordance with court rules. In this article, I describe the various types of calendaring software and the essential features a program must possess to provide serious protection against malpractice claims.
My hope is that malpractice carriers will use these features in a checklist to determine how well a law firm's calendaring system protects against missed dates and deadlines, and that carriers will base their discounts on the level of real malpractice protection the software provides. By doing this, carriers will reduce malpractice claims by giving law firms an economic incentive for using effective calendaring programs.
Lawyers and law firms formerly kept their calendars manually. In litigation, this is a complex process because certain key dates, such as the trial date, prompt a series of other related dates and deadlines. Consider the implications of a trial date being set, which can then trigger other dates being set. For instance, in California Superior Courts, the last day to exchange the identity of expert witnesses is 70 days before the trial date or 10 days after the trial setting conference, whichever is later.
To calculate these dates manually, people used paper calendars, calculators, or their fingers to count backwards and mark the associated deadlines. This process was time-consuming, error prone, and unpleasant. Moreover, any given case might produce scores of related dates, each of which had to be manually calculated--and recalculated--as the dates for motion hearings, trials, and the like changed. This process was so complex, important, and rife with potential malpractice that many large firms created in-house docket departments to calculate these dates and deadlines.
It also became clear that this process could benefit greatly from automation. As law firms computerized, two kinds of calendar programs emerged that often prompt discounts from legal malpractice carriers.
In my view, the first type of calendar software provides no significant malpractice protection and only firms using the second type of program should be given discounts in malpractice premiums.
Historically, only a handful of software publishers provided calendar programs with scheduling engines that automatically schedule lawyers' calendars based on a database of court rules. Even fewer provided preprogrammed court rules; most relied on law firms themselves to enter the rules into the database.
Recently, however, CompuLaw Ltd., a Los Angeles-based publisher that dominates the legal calendaring software market, began licensing its highly reputed scheduling engine and library of preprogrammed court rules, the nation's largest, to case management software publishers. Without question, this means that the use of sophisticated calendaring programs will become even more commonplace.
Thus, this would be a particularly appropriate time for the insurance industry to become more discriminating--offering premium discounts to firms that actually use programs that automatically schedule lawyers' calendars rather than just any system that calls itself a calendar program. Here are the features calendaring programs should possess to warrant premium discounts:
With these features, a legal calendaring program can significantly reduce the likelihood of malpractice claims. Programs without these features offer no such prospective liability reductions. It makes sense that legal malpractice carriers begin recognizing the difference in their pricing.
|Howard Yellen, J.D. is executive director of the California Bar Association's Law Office Management Assistance Program and president of Professional Consulting Group, a San Francisco-based legal technology-consulting firm. While earning his J.D. at Boalt Hall in 1989, Yellen Served as technology editor of the California Law Review, and as computer systems manager for the law school.|