For better or worse, lawyers are the public face of their law firms. Sometimes an attorney’s activities, either in their free time or through the cases they accept, have the potential to reflect poorly on their firms. Depending on the circumstances, these situations can lead the firm’s partners to make difficult decisions.
Such was the case for a Wilmington, Delaware law firm when the judgement of one of their attorney’s was called into question by an industry peer regarding his decision to defend a Pennsylvania high school’s American Indian Mascot. The York Dispatch reported that after being forced to resign, the attorney in question, Scott Cousins filed a defamation lawsuit against the attorney who highlighted the moral issues with his decision. In the end, the Delaware Supreme Court upheld the dismissal of Cousins’ defamation suit.
Rogue lawyers come in many forms. As such, law firms and attorneys need to understand how outside activities and affiliations might put the firm at risk and how to insulate the organization should the worst occur. The truth is situations such as Cousins’ are more common than we think. In fact, such situations are proof that law firms should be prepared for anything. An Employment Practices Liability Insurance (EPLI) policy is a key line of defense for law firms to limit several risks presented by their own attorneys. As a key line of defense, it is critical to set a baseline to understand EPLI and how they can protect your firm.
- What is it? EPLI is designed to help a business defend itself against claims made by employees. In the event an employee makes a claim, EPLI can financially assist law firms with defense costs and damages.
- What does it cover? Provided the firm has not done anything illegal, EPLI will cover a myriad of claims including age, gender and race discrimination, invasion of privacy, retaliation and more. In most cases, an EPLI policy will reimburse an insured firm for the costs associated with defending itself. It is important to note an EPLI policy does not cover civil fines, criminal fines or punitive damages.
- What does it cost? The cost of EPLI depends on the size of a law firm, the limit the firm chooses (ranging from $100,000 to $1,000,000,) claims history and more. Firms can work to limit the costs of EPLI by implementing risk management strategies such as establishing clear workplace expectations, complaint procedures and response protocols. Employees should then be trained on all protocols and participate in trainings to address common workplace issues.
In the modern world, there is no telling what claims could be made against a law firm. And even with the best screening protocols, any employee can put their firm in a compromising position. As such, law firms need to protect their businesses and employees from the financial havoc other employees’ claims can wreak on an organization. An agent or broker who specializes in insurance for lawyers and legal professionals can help ensure your firm has the correct EPLI policy in place and take the proper steps to mitigate risks.