Bad economy fuels legal malpractice claims

The economic downturn is fueling a new batch of malpractice claims against lawyers. "When you talk to claims people, they are consistently seeing that volume is up," said Edith Matthai, a partner with Robie & Matthai in Los Angeles and chair of the lawyers professional liability committee of the ABA.

Karen McCarthy, president and CEO of The Bar Plan Mutual Insurance Co., which writes policies primarily for solo and small firms, said there is a lag time between an economic downturn and filing of claims but that "we fully anticipate an increase in claims."

On the other hand, Paul Ablan, senior vice president and managing director of professional liability with One Beacon Professional Partners in Minnetonka, Minn., said that instead of an increase, he is seeing a larger percentage of claims shifting to the business-related areas of law.

"We're seeing a bigger percentage of real estate claims and commercial transactions that either failed or didn't come out the way a client expected them to. This is tied to the economic cycle," he said.