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Using technology to decrease malpractice risks for law firms

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The threat of malpractice claims is one that every law firm has to deal with. Especially in today’s fast-paced business and legal environment, there are numerous pitfalls for legal practitioners. This means there is an ongoing risk of committing legal malpractice, as well as a risk of facing malpractice claims, whether or not those claims have merit. Fortunately, there are numerous ways in which modern technology can mitigate these risks.

As a legal professional, you first need to understand the current malpractice risks. Then you need to learn how today’s digital technology can effectively address those risks. Finally, you can make a plan for working technology into your firm’s efforts at malpractice prevention.

Malpractice risks abound in the legal profession

Legal malpractice claims have been on the rise in the United States. A 2019 survey of professional liability insurers revealed that malpractice claims were growing at a record pace. In addition, the survey showed multi-million dollar payouts for malpractice claims increased for the second consecutive year.

So what types of firms and legal activities have been giving rise to these malpractice claims? An American Bar Association (ABA) survey of professional malpractice carriers for the 2015-2019 time period revealed some interesting trends. Solo practitioners were the largest source of claims, with a majority of claims coming from firms with 1-5 attorneys. But larger firms were not immune, with claims rising against them as well. The top 5 activities leading to malpractice claims were as follows:

  1. Preparation, filing, and transmittal of documents
  2. Commencement of an action or proceeding
  3. Legal advice
  4. Settlement and/or negotiation
  5. Pre-trial or pre-hearing activities

Almost 20% of reported claims arose from administrative errors, which included clerical errors, calendaring errors, and procrastination. Accordingly, it makes sense to examine how technology can assist law firms in these areas.

Technology can mitigate malpractice risks

The good news is that digital technology is an ideal way to address the malpractice risks posed by administrative errors. In fact, this may already be happening within the legal industry.

There is evidence of declines in malpractice claims resulting from administrative errors since 2011, according to an ABA survey and a prominent malpractice carrier in Wisconsin. This has coincided with the legal industry’s increased use of software for administrative tasks such as calendaring, time management, and file storage. It may be that this increased software usage is contributing to the decline in “administrative error” claims.

Technology can drastically reduce or eliminate errors that were common in the legal field years ago. Tech systems can provide reminders, notices and alarms to ensure deadlines are met and all details addressed. And as time goes on, technology is expanding to different areas of day-to-day legal practice, such as case management, communications with clients and opposing counsel, service of process, court communications, and electronic filing. The tech-savvy legal professional can likely find tech solutions for most of her administrative headaches.

Working technology into your malpractice prevention efforts

While tech can undoubtedly reduce malpractice risks, the next step in malpractice prevention efforts is actually implementing the technology at your firm. The following are some specific steps you can take in that direction.

Implement practice management software

Implementation of practice management software is the first basic step in reducing malpractice risk through tech solutions. In addition to lowering risk, this software can increase your office’s efficiency and productivity by streamlining and automating numerous processes. Not only that, practice management software increases your firm’s scalability by allowing you to handle more matters and client work with less staff.

Be sure to research your options when choosing the software to implement. Consider the major functions where you would like to introduce tech solutions at your firm. And be sure to run demos with any options you find the most viable.  Switching tools can be difficult and time-consuming, so invest time in the initial selection.

Keep up on potential software add-ons

Also, be sure to stay aware of potential add-ons that integrate with your existing tools. For example, your software may offer an add-on that enables automated document drafting. Not only will this add functionality to your current software, the apps will eliminate the need to jump from one application to another. Instead, all the operations can be run seamlessly from a single platform.

Expand tech use into client communications

The emerging use of tech in the legal workplace is facilitating client communications. With varied channels of communication with clients — phone calls, emails, text messages, in-person meetings, and more — it is very easy for an important message to fall through the cracks. This has been especially true during the COVID pandemic, when law offices were unexpectedly thrust into partially or fully remote work. Implementing a digital client communications platform can bring all these communications into one place.

Not only can a unified communications platform reduce malpractice risk, it can also help defend against malpractice claims. The platform can provide an audit trail by tracking all client communications in an easy-to-review format. This could be vital in defending against a malpractice claim or state bar investigation where client communications are at issue.

Mitigation of malpractice risk is a key concern for any law firm. While a shift toward digital technology may feel like a daunting task, most law firms will find their legal professionals breathing easier once the tech is in place to address that risk. 

Author

  • After a fifteen-year legal career in business and healthcare finance litigation, Mike Robinson now crafts compelling content that explores topics around technology, litigation, and process improvements in the legal industry.