The four general areas of LEGAL MALPRACTICE are negligent errors, negligence in the professional relationship, fee disputes, and claims filed by an adversary or nonclient against a lawyer. As in the medical field, lawyers must conform to standards of conduct recognized by the profession.
A lawyer has the duty, in all dealings and relations with a client, to act with honesty, GOOD FAITH, fairness, integrity, and fidelity. A lawyer must possess the legal skill and knowledge that is ordinarily possessed by members of the profession.
Once the lawyer and the client terminate their relationship, a lawyer is not allowed to acquire an interest that is adverse to a client, in the event that this might constitute a breach of the ATTORNEY-CLIENT PRIVILEGE. In addition, a lawyer cannot use information that he obtained from a client as a result of their relationship. For example, it would constitute unethical behavior for an attorney to first advise a client to sell a piece of property so it would not be included in the client's PROPERTY SETTLEMENT upon DIVORCE and then to purchase the property from the client for half its market value.
Any dealings that a lawyer has with a client will be carefully examined. Such dealings require fairness and honesty, and the lawyer must show that no UNDUE INFLUENCE was exercised and that the client received the same benefits and advantages as if she had been dealing with a stranger. If the client had independent legal advice about any transaction, that is usually sufficient to meet the lawyer's burden to prove fairness.
A lawyer also has the duty to provide a client with a full, detailed, and accurate account of all money and property handled for him or her. The client is entitled to receive anything that the lawyer has acquired in violation of his duties to the client.
If a lawyer fails to promptly pay all funds to his client, the lawyer may be required to pay interest. A lawyer is liable for fraud—except when the client caused the attorney to commit fraud—and is generally liable for any damages resulting to the client by his negligence. In addition, a lawyer is responsible for the acts of his associates, clerks, legal assistants, and partners and may be liable for their acts if they result in losses to the client.
Negligent errors are most commonly associated with legal malpractice. This category is based on the premise that an attorney has committed an error that would have been avoided by a competent attorney who exercises a reasonable standard of care. Lawyers who give improper advice, improperly prepare documents, fail to file documents, or make a faulty analysis in examining the title to real estate may be charged with malpractice by their clients. A legal malpractice action, however, is not likely to succeed if the lawyer committed an error because an issue of law was unsettled or debatable.
Many legal malpractice claims are filed because of negligence in the professional relationship. The improper and unprofessional handling of the attorney-client relationship leads to negligence claims that are not based on the actual services provided. Lawyers who fail to communicate with their clients about the difficulties and realities of the particular claim risk malpractice suits from dissatisfied clients who believe that their lawyer was responsible for losing the case.
Another area of legal malpractice involves fee disputes. When attorneys sue clients for attorneys' fees, many clients assert malpractice as a defense. As a defense, it can reduce or totally eliminate the lawyer's recovery of fees. The frequency of these claims is declining, in part perhaps because attorneys are reluctant to sue to recover their fees.
A final area of legal malpractice litigation concerns claims that do not involve a deficiency in the quality of the lawyer's legal services provided to the client, but an injury caused to a third party because of the lawyer's representation. This category includes tort claims filed against an attorney alleging MALICIOUS PROSECUTION, ABUSE OF PROCESS, DEFAMATION, infliction of emotional distress, and other theories based on the manner in which the attorney represented the client. These suits rarely are successful except for malicious prosecution. Third-party claims also arise from various statutes, such as SECURITIES regulations, and motions for sanctions, such as under Federal Rule of Civil Procedure 11.