The legal industry has grappled with a few bad apples who have left a bad taste in the public’s mouth when they think about attorneys. Lawyers such as the infamous Michael Avanetti, a high-profile attorney with his named attached to well-known political figures and mainstream celebrities, are bound to drum up mistrust when the public is made aware of any alleged or actual wrong doings. In the case of Avanetti, he continues to defend himself against numerous charges amid national media scrutiny, not to mention a 36-count indictment alleging fraud, embezzlement, perjury, and more. This begs the question for legal professionals; how can law firms protect themselves against that?
Insurance and what it covers
The reality is attorneys out in the world pose a risk to law firms. This is the impetus for law firms to secure lawyers professional liability insurance (LPLI) policies to protect their businesses from costly claims that can include misrepresentation, negligence, conflict of interest and more.
What LPLI does not cover is criminal acts. For example, a lawyer in Avanetti’s position, facing tax fraud and extortion charges, would not be covered under a firm or even solo practitioner’s LPLI policy. If a lawyer commits a crime and no one else in the firm was aware, only the lawyer in question would not be covered while the LPLI policy would cover the firm’s defense costs, and potentially a successful claim against the firm itself. An insurance professional who specializes in insurance for lawyers can help ensure a firm has the correct LPLI coverages.
Strengthening your defenses
While insurance will help protect a firm from the financial repercussions of an attorney’s unethical or criminal behavior, there is no telling what impact that behavior might have on the reputation of the firm. Law firms need to be diligent in their screening and administrative processes. Consider the following defenses to avoid falling victim to the next high-profile bad apple:
- Screening: Before bringing on a new attorney, law firms should be diligent in their screening processes. Ask questions about their intentions, books of business, and practices. Firms should require and contact several references. Look for inconsistencies or red flags that can indicate a potential bigger threat in the future, including prior claims of malpractice or negligence.
- Review regularly: The best way to hold attorneys accountable and to be informed of their activities is regular reviews of their practices, clients, financials and more. If there are any inconsistencies, big or small, the firm should carry out an investigation.
Encourage transparency: To avoid unnecessary risk, all attorneys in a firm need to be equally informed. If one attorney is aware of something that could pose a threat to the firm, they should be encouraged to report it. In a work culture of transparency and shared risk, ethical attorneys can better protect their reputations.
Unfortunately, law firms are often find out about their attorney’s unethical behavior far too late. While there is no foolproof way to stop a Michael Avanetti from unethical behavior, law firms should make every effort to stay informed, hold their attorneys accountable and take the proper steps to protect the entire organization.