Attorney says spike in legal malpractice suits has roots in economic struggles

By Mike Helenthal | Oct 24, 2016

CHICAGO – A Chicago attorney who for 30 years has defended lawyers facing disciplinary proceedings says that findings in a recent report from the American Bar Association on national trends in legal malpractice litigation reflect a still struggling economy.

The ABA report, titled “Profile of Legal Malpractice Claims 2012-15,” analyzed legal malpractice claims in that time period using data from insurers. The report was prepared by the ABA's lawyers’ professional liability committee,

Findings in the report concluded that legal malpractice cases nationally have increased since 2011, making settlements more likely as insurers attempt to avoid expensive judgments.

“There can be a tendency for Big Law to settle because when they get hit with a mistake, it can be very costly,” Thomas McGarry, a partner at the Chicago based Hinshaw and Culbertson law firm, told the Cook County Record.

He said consumer law has burgeoned, along with a corresponding jump in malpractice claims, because of economic conditions and because consumer laws make filing suit easy.

“Consumers are taking them on because there is a low risk to the consumer," he said. "And I don’t see the consumer laws lightening up.”

He said the trend has also led to an increase in attorneys attracted to the practice of consumer law, noting the ABA report says that most claims were filed against small firms – firms that may have less experience in handling those claims.

“We’re seeing our collections lawyers getting themselves into consumer law, but there’s a big learning curve," he said. "A lot of these firms are made up of five or fewer attorneys.”

McGarry said the nation’s economic troubles are reflected in the rankings of the ABA report, which show the most legal malpractice claims being made in the categories of personal injury, real estate, family law, trusts and estates, and bankruptcy and collections.

“Personal injury is always ranked pretty significantly,” he said, but real estate replaced it during the 2008 recession and continues to run high because of the still-weakened real estate market.

“Bankruptcy is still trending up, and so is real estate,” he said. “We thought real estate was sort of an anomaly in 2015, but it’s been more of a trend because the economy is still relatively weak.”

Factors related to the economy have also made people who are adversely affected likely to seek legal counsel.

“There’s a lot of people with a ton of consumer debt and they’ve been getting collection letters,” he said.

But it also has led to some very high expectations among clients – especially in cases involving family law – who sometimes place the blame for failure on their legal representation, not their weak case.

In most cases, he said, personal plaintiffs file complaints on issues that are later found to have been nothing more than an administrative error. He said the bar for proof of legal malpractice is high in Illinois, and hearings involve a required professional witness, just like a medical malpractice proceeding against a doctor.

“Plaintiffs have to show they would have won or that they would have got a better deal,” he said. “There’s a tendency to want to blame the lawyers for the system.

“And they forget that lawyers charge by the hour. A lot of these claims just fail.”

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