I’m always cautioning lawyers about the hazards of dabbling, reminding them that there really is no such thing as a “simple” will or contract. It’s not that I want them to avoid taking on matters that lead them into unfamiliar territory. Rather, my intention is to remind lawyers that if they choose to do this, they must be responsible about it. For example, they might research the law, seek advice from a mentor, find another lawyer willing to act as co-counsel, call in a favor from a colleague or take a relevant CLE course.
I just don’t want to see them “shooting from the hip” because that can really backfire. It is simply too easy to forget that you don’t know what you don’t know. Far too often the matter only appears simple because you don’t know what questions to ask.
How to Avoid the Hazards of “Dabbling” in PI Work
One especially problematic practice area lawyers tend to dabble in is personal injury (PI) plaintiff work, and this can be a costly mistake. I offer the following questions to consider the next time you are tempted to say yes when a seemingly simple, hard-to-resist PI plaintiff matter falls in your lap.
1. Are there any liens? Do you understand the consequences of workers’ compensation liens, medical liens (including Medicare, Medicaid, and other state and federal liens), attorney liens or liens subject to ERISA regulations on settlement proceeds? Liens can significantly reduce the amount of recovery that will eventually reach the client, leaving the legal fee potentially higher than the sum the client eventually receives. Unless both attorney and client are fully aware of the presence and impact of potential liens at the beginning of a case, a fee dispute (or worse) is in the making. In addition, under certain circumstances, an attorney can be held personally liable for failing to protect liens against a client recovery.
2. Can you bear the cost? Are you fully prepared to handle and fund the case through trial? It is not unusual to find this isn’t the open-and-shut case you first thought — and that “quick settlement” isn’t just around the corner. What if the time demands of the case grow, the costs (experts, depositions, travel, staff time) are far above what you originally anticipated, and the likelihood of reaching any settlement at all begins to diminish? Once a trial is on the horizon, this “simple” case may significantly affect your ability to attend to other client matters. If you are not careful, your case load can spiral out of control. Conflict problems can also arise if you make tactical legal decisions based on your personal financial pressures.
3. Do you have time to be thorough? Do you have the time to and are you adept at independently verifying facts relevant to the statute-of-limitations date and identifying the correct defendants from reliable sources? Clients, and people to whom they talk (e.g., physicians), may not be reliable sources. Accident dates should be verified from independent sources such as police reports, and the dates on the reports themselves should be verified. Understand that the driver of the other car may not be the owner of the car. Thorough investigation from reliable sources is the only way to ensure that you have accurately determined all possible sources of liability coverage for your client — and this can take significant time and effort.
4. Can you identify and deal with a problem client? Some plaintiffs have very minor injuries, are complainers, are demanding, have unreasonable expectations about their desired recovery, are unwilling to follow through with medical treatment recommendations — and don’t stay in contact. If you’re not adept at dealing with clients like this, the situation can quickly get out of control, especially if you passively neglect the matter. Procrastination and avoidance can easily lead to missed deadlines, such as statute-of-limitation dates, and other problems that could have been effectively dealt with had they been immediately addressed.
5. Are you adept at managing client expectations? You want to avoid allowing the client to form unreasonable expectations based on any promise of a large award or quick resolution. You must take time to investigate the matter before discussing possible outcomes. Also, it is essential to keep the client fully informed at all times. Most importantly, clearly spell out the scope of representation defining and documenting what work will be done, and what work will not be done. If fee-splitting is involved, be certain the agreement is completely explained to the client. Finally, in the event of a recovery, explain how the proceeds will be handled and what bills, expenses and liens will be covered out of the proceeds. Make sure there are no surprises when the time comes for the client to review and sign off on the disbursement statement.
6. What do you know about taxes? Do you have a basic understanding of the tax ramifications of damage awards (to include any interest on the judgment) and settlement payments? If not, tread carefully. Be aware that a blanket statement that you will provide no tax advice may not fully protect you. As the attorney, at minimum you are responsible for issue-spotting on basic tax issues, and for then seeking outside help or advising your client to do so to ensure that tax issues are understood and properly addressed.
7. What trial experience? Do you have a working knowledge of the relevant statutes and their application in the various state and federal courts? Do you have a working knowledge of the various state and federal court rules? If not, seek assistance. A seasoned trial attorney should be brought in as co-counsel if you wish to stay involved. Take time to “learn the ropes” from someone who is skilled in handling PI plaintiff matters. Otherwise, refer the matter to someone else. The ramifications of missing critical deadlines can be quite serious — even in those seemingly simple matters.
Mark Bassingthwaighte is Risk Manager for ALPS Property & Casualty Insurance Company (ALPS), a leading provider of lawyers’ professional liability insurance. In his tenure with the company, he has conducted over 1,000 law firm risk management assessment visits, presented numerous continuing legal education seminars throughout the U.S., and written extensively on risk management and technology. Mark received his J.D. from Drake University Law School and can be contacted at email@example.com.