Law firms live and die on their reputations. So, when an attorney becomes subject to an ethics review or allegations of misconduct are leveled, understanding what to do first is crucial.
Ethics related cases and claims can be extremely serious – and they happen all too often, as stories in the press routinely show. Part of being proactive in protecting and defending the firm’s reputation goes beyond the violation itself. It’s about understanding the implications for a law firm’s professional liability insurance policy and working to avoid such issues from the start.
Professional liability insurance policies may include coverage for specific ethics violations, while others still may have exclusions or limitations.
It is important for law firms to notify their insurer and cooperate fully during investigation process involving ethics or misconduct claims. Failure to do so may result in coverage denials, liability exposure and other potential financial consequences for the firm. If the conduct being investigated is found to be intentional during the investigation, or if the attorney acted outside the scope of their professional duties, insurers may deny coverage. Law firms should therefore always review professional liability insurance policies to see what will be considered a covered claim and what will not.
Mitigating Ethics and Misconduct Issues
Law firms should move quickly to minimize the risks posed to their reputation when an ethics or misconduct complaint is filed. This can include:
- Conducting internal investigations
- Cooperating fully with the ethics review process
- Implementing disciplinary measures
- Contacting a crisis communications agency for possible support
Firms should also invest in ethics training programs, creating a positive culture of compliance and facilitating open communication with all staff to ensure the highest level of ethical standards and accountability. When a firm’s reputation is at risk, all staff suffer the consequences.
Ethics reviews and allegations of misconduct not only threaten the firm’s reputation, but also the viability of their professional liability insurance coverage. However, the biggest risk a firm faces is with client trust. As such, firms should be transparent with their clients, acknowledge any mistakes and take appropriate corrective actions. Open communication and demonstrating a commitment to ethical conduct can help restore confidence in the firm’s integrity.
Understanding the reputational and liability implications of an ethics violation and knowing how to successfully navigate the dangers it can pose to professional liability insurance allows firms to better navigate these challenging situations.