All attorneys understand the possibility of a legal malpractice claim exists in the abstract. However, as a general rule, attorneys have little appreciation of the scale of the issue. In part, this may be due to our industry’s historic lack of attention to the statistical details regarding legal malpractice claims. The medical industry has become very adept over the years at analyzing the percentage of patients whose care results in medical malpractice claims. The legal industry has not followed suit.
One of the difficulties in analyzing the prevalence of legal malpractice claims is the data we do have generally comes from insurance companies. The data from insurance companies is inadequate in a number of respects. Most obviously, the data from insurance companies does not include claims made against attorneys who do not maintain professional liability insurance. Although Pennsylvania Rule of Professional Conduct 1.4(c) requires attorneys to inform clients if they do not maintain at least $100,000 of insurance per incident and $300,000 per year, it does not require attorneys to maintain professional liability insurance. It is estimated that 20 to 25 percent of attorneys in Pennsylvania are uninsured. Uninsured attorneys are predominantly solo and small firm attorneys, and claims against them are not reflected in the data kept by insurance companies. On the other end of the spectrum, most large companies have exceptionally high deductibles or self retentions, which also causes claims to frequently fail to appear in insurance company data.
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