"Most Leading Law Firm Insurers See Rise in Malpractice Claims Frequency, Severity"
Ames & Gough has another of their surveys out. Excerpt from press release:
What’s driving the claims volume? “The key impetus is the recession of 2007 to 2009,” said Ms. Garczynski, although many of these claims are still working their way toward resolution. During the recession, a spate of malpractice claims developed around failed transactions as well as failed litigation. In the latter, when suits brought against other parties didn’t obtain the anticipated recovery, clients subsequently took action against their legal counsel.Heightened M&A and lateral movement between firms is also driving an increase in claims. “Today, there’s no question law firms are operating in an intensely competitive landscape,” said Ms. Garczynski. “The imperative for survival and the drive for growth are leading to more firm mergers and the hiring of attorneys from other firms. Unfortunately, these initiatives often bring greater risks.” Indeed, five of seven insurers surveyed attributed the rise in claims to mergers and lateral hires. All five of the insurers experiencing claim increases cited new, lateral-hired attorneys who continue to work on clients of their former firms while employed at their new firm as creating potential claim issues.