The Seventh Circuit Court of Appeals has settled a dispute between an accountant and her homeowners insurer over client data that was stolen on her personal property.

The accountant had a disc with over thirty thousand names and social security numbers of a pension fund she was working with stored in her car. When the CD went missing the fund paid over two hundred thousand dollars to provide required identity protection services to the the affected persons. The fund then came after the accountant personally for reimbursement.

The accountant attempted to file a claim under her home insurance policy, which the court of appeals has ruled did not have to provide coverage.

ProtectLawyers.com reminds it’s clients that as the costs of protecting confidential data grow almost all insurers have excluded coverage for these types of claims under their policies. Work with an expert broker to ensure the coverage you need is place properly.

Central Illinois Taxi has filed a lawsuit against its attorney for what can be described as procedural errors.  Central Illinois Taxi (CIT) had a contract with a governmental department to drive medicaid patients to the hospital.  The department claimed that CIT had over billed them an amount in excess of $1M and the matter went to court.  CIT engaged the services of a lawyer who allegedly missed filing deadlines, and asked for oral arguments but then never gave an oral argument.  The underlying case was decided against Central Taxi and they are now suing their attorney in Madison County Circuit Court – case number: 13-L-9.

While this case remains allegations at this point, there are lessons to be learned.  It is mission critical for law firms to avoid malpractice suits, and this case highlights a few ways to do that.

• Engagement Letters – It is important to document the terms of an engagement in an engagement letter.  As the scope expands, the engagement letter should be added to.
• Client Communication – Beyond the engagement letter,  it is important for firms and attorneys to understand what expectations the client may have and to regularly communicate with the client on matters as they develop.
• Insurance – Finally, It is important for firms to carry the proper type and amount of insurance to protect the firm when a lawsuit does come.

Contact an expert broker to discuss ways to protect your firm and assure that the proper limits and types of insurance are carried.

As we reported earlier, the Supreme Court is hearing a legal malpractice case involving patent infringement litigation.

The transcript of the oral arguments are now available here.

ProtectLawyers.com will make updates available when an opinion is released later this year.

As 2013 begins, it is important to consider your firm’s practice from each angle. One factor that is consistently near the top of the list of important – but easy to overlook – risk exposures. This risk is employment practices lawsuits. The Equal Employment Opportunity Commission (EEOC) manages, investigates and prosecutes employment related complaints regarding federal law. The EEOC reported its 2012 findings and the results may indicate trends for what to expect for this year. New complaints in 2012 totaled 111,139 (down slightly from 112,499 in 2011), while resolutions remained just below 100,000 as it has been the previous two years. However, the dollars recovered by the EEOC were the highest ever – $44.2 Million through litigation and $365.4 million through administrative enforcement. This shows that the EEOC may be pursuing larger cases on average and pursuing cases to closure at a more efficient rate.

It is clearly proper for a firm to have no wrongful employment practices. However, with limited resources, it is important to understand what the EEOC may be looking at more critically. With this information, a firm can better decide how and where to invest its capital in order to best protect its firm. Knowing where the EEOC is focusing its efforts can help determine where to spend the additional dollar making sure the firm is in compliance. Based on the notable cases of 2012, Calculated Risk Advisors recommends firms pay special attention to the following areas:

• Hiring Practices – A global beverage company was using previous arrest record if their hiring decision matrix. The EEOC found that this disqualified a large amount of black workers from the hiring process. To settle the issue, the company paid over $4 million dollars.
• Disability Discrimination – An HR practice held by a large trucking company stated that any employee requiring more than 12 weeks of leave would be automatically terminated. After investigation, the EEOC found this rigid rule to discriminate those with disabilities. The trucking company agree to pay $4.8 million to settle the matter.
• Retaliation claims – This occurs when an employee experiences unfair or wrongful practice after filing a complaint within a company. The EEOC is increasingly pursuing these actions.

In order to prevent claims of these types, a firm should include the following employment-related risk management practices in its operations:

• Disparate Impact Studies – Before the implementation of a company policy, perform a study to determine with the policy will impact a certain type of employee greater than the others.
• Release of Liability – Obtain a signed release of liability from an employee who is let go.
• Out-placement services – Provide access to services that assist terminated employees find new employment.
• Avoid Blanket Policies – The EEOC is suspicious of sweeping or broad employment policies and are investigating. Terms such as “any”, “always”, “without excuse” should be avoided.

For further discussion on ways to protect your company from employment practices liability, contact Calculated Risk Advisors today.

Theranos, Inc and Elizabeth Holmes recently filed suit against law firm McDermott, Will & Emery in Disctrict of Columbia Superior Court.  The lawyers malpractice lawsuit alleges that former McDermott partner John Fuisz gained access to patent applications that the firm was working on for Theranos and then gave the plans to his own family – allowing them to patent a similar device themselves.  This claim comes as the recent development in a long string of legal battles between the firm and the plaintiff.

It is necessary for law firms to have safeguards on all client information – both from the public and from within.  While this situation might be hard to prevent, proper steps should be taken to prevent accidental loss or theft of client data.  Contact ProtectLawyers.com to discuss ways a firm can better protect itself from professional liability claims.

As most firms who accept credit cards are aware the Housing Assistance Tax Act of 2008 requires credit card processors to match all merchant’s FEIN with the legal name on file with the IRS. These regulations started to phase in during 2011 but  this month there will be a 28% withholding penalty for firms who have not complied.

For firms who hold credit card payments in trust, this could lead to serious issues.

Contact ProtectLawyers.com today to help protect your firm from the rising costs of increased regulations.

The Dood Frank act brought unlimited FDIC insurance for Interest on Lawyers Trust Accounts (IOLTA) accounts, that feature of the law has not been renewed after expiring 12/31/12.

Law Firms should put controls in place to catch balances over the $250,000 limit and determine how best to handle. As a fiduciary of their clients funds a firm could be put at risk if a bank holding those funds is put into receivership.

Contact ProtectLawyers.com today to discuss better protecting your firm against adverse events.

Boston-based law firm Goodwin Procter is facing a lawsuit alleging improper billing practices.  The plaintiff is claiming that the invoices submitted by the law firm were vague and overly high.  Examples provided by the plaintiff include charges of $800 an hour for a “telephone conference” and $825 an hour for “attention to deal.”  The total billings for the work done by the firm amount to over $1M.  This is not the first time Goodwin Procter has been involved with an invoicing dispute.

There are many best practices when it comes to invoices and billings, most state bars and the ABA require clear and regular communication with clients.  To avoid law firm malpractice claims, every firm should:

1) Provide frequent invoices in order to prevent “sticker shock”

2) Itemize each invoice into what was done and why it was relevant to the case

3)Avoid multiple attorneys from billing for similar work unless an explanation is provided

While this case is in its infancy, the lesson is poignant to all firms.  Contact us today to learn more about protecting your law firm.

From news articles to magazines and from radio to talk shows, the  last two months of 2012 have been flooded with stories of how  the private sector has great concern over the uncertain financial and economic future.  As a result, many business owners have delayed updating their equipment; froze hiring; or even made cuts to staff and budgets.  Below is a chart (taken from AccountingToday.com on 12/21/2012) depicting some of the concerns facing businesses.

Despite the financial uncertainty, firms must remain focused on their risk management practices.  Failure to remain current and disciplined could lead to a lawsuit that would certainly impact the business.  Contact us to structure your law firm insurance program to save money and to make certain that you have the proper coverage in place to protect your firm.

South Texas trial attorneys, The O’Quinn Law Firm, have been sued by 31 former clients for deducting unauthorized expenses from clients, “squandering” client money and failing to deliver settlement awards from the “silicosis litigation machine” they ran. Details are available here.

31 former clients have brought allegations of wrongdoing.

Contact ProtectLawyers.com today to better protect your firm from allegations of wrongdoing.