For most of the past 20 years or so, when looking at areas of practice that generated the most claims in any given year at Wisconsin Lawyers Mutual Insurance Co. (WILMIC), family law almost never cracked the top five. But in 2016, claims arising out of family law cases were fourth highest. Bankruptcy and collections, estate planning, and real estate are first, second, and third. That is not new. Those areas have historically been near the top of the list. But the number of claims arising out of family law cases has risen somewhat significantly this year at WILMIC. Why?
Many of the reasons for the increase can be found in the category of “client communication,” specifically things such as failing to obtain client consent, failing to follow client instructions, lack of responsiveness to the client, and procrastination and client follow-up.
Madison lawyer Janice Wexler says client communication is critically important. “I tell clients I make every effort to respond to voice mail or email within 24 hours. That being said, my outgoing phone message is changed every day so clients know if they can’t get hold of me where I am – in court, in client meetings, writing a brief, or whatever I’m doing that day. I always give them an option to contact my paralegal, and my outgoing message facilitates that – as she can always find me! If I’m in a situation where I can’t get email, or I don’t want to get email, I will put a vacation responder on my email – again giving paralegal contact information. Clients who know why you aren’t accessible are fine not being able to make contact right away.”
Marta Meyers, a lawyer with Boardman & Clark in Madison, agrees good communication is crucial. “But, it can be really hard. Family law lawyers can get so busy and have a hard time fitting in all the calls. We tend to be in a lot of client meetings; meetings with opposing counsel and with experts, and then in mediations or in court. We get caught up in the moment and so it’s hard to turn to other pending matters and make that phone call.
“Plus, clients sometimes don’t realize that they are repeating themselves. We are telling them the same thing over and over. They are venting to us but don’t realize that we can’t perform magic and get them 100 percent of what they want.”
Malpractice Claims Perspective
Brian Anderson, senior claims attorney at WILMIC, says of all the claims coming from family law cases this year, the most common issues are failing to prepare or file a qualified domestic relations order (QDRO) and fee disputes. “A mistake that we continue to see over the years is when a lawyer either didn’t get the QDRO filed, or the client misunderstood the amount they would
6 Steps to Minimize Risk in Family Law Cases
With family law claims rising this year, lawyers need to pay attention to the details:
- Carefully select clients.
- Watch for any potential fee disputes.
- Put everything in writing.
- Outsource work in which you do not have expertise.
- Identify and address the client’s expectations.
- Communicate with the client.
ultimately receive from the QDRO. This happens more often than you might think. Or, the client alleges that the lawyer miscalculated the amount they would receive and when they find out it’s less than they were expecting, the malpractice claim arises.”
QDROs are commonly used in divorces. So why do many of them result in malpractice claims? Anderson says some family law attorneys make the mistake of trying to draft a QDRO themselves rather than outsourcing that work. “Lawyers should consider hiring an expert to draft a QDRO, and many of them do outsource this work. In some cases, there are hybrid retirement plans and sometimes much more sophisticated plans. For these, an expert is often advisable.”
Even with the expert drafter, Anderson warns, lawyers can run into problems. “Lawyers should at least make sure they understand these documents well enough to protect their clients. We’ve had cases where the lawyer did not even read the QDRO, assuming that because an expert drafted the document, it was fine. That can be a huge mistake.”
When clients discover they are not getting what they thought they were, the common refrain is, “I wouldn’t have signed the agreement had I known,” or, “My lawyer made me sign it.”
Anderson says, “We have seen cases in which former clients claimed their lawyer incorrectly evaluated the assets to be divided, leaving them with less than they deserved, and then ‘bullied’ them into signing the stipulation – in essence a coercion malpractice claim.”
Anderson adds that family law practice is more vulnerable to the “coercion claim” for an obvious reason: “Emotions often run high in family law cases. When things go badly for someone, looking for a scapegoat is not all that unusual.”
Madison lawyer Megan Phillips says managing the emotions of clients is an important part of family law practice.
“Unrealistic expectations are often a problem because initial consultations are too short, or the information covered in those important first communications is too fact heavy and not enough about the overall picture. I always ask a potential client for his or her top three goals. If I know I cannot feasibly meet all three, I recommend that the client go elsewhere. If I do decide to work with the client I frequently revisit those top three goals midway through a case to see what progress we’ve made. This is a reality check between the client and the lawyer. Usually, the client is pleasantly surprised that most of his or her goals are within reach at that point. If not, they have detailed information about why not.”
Phillips’ policy is to always underpromise and overdeliver. “When talking to the client, I describe the ideal outcome as an ‘outside chance’ rather than a slam dunk. This makes the lawyer look like the hero rather than the failure if very good results happen. And if the worst-case scenario materializes, the client has already heard about it, reflected on it, and prepared for it.”
Wexler says she watches for warning signs from her clients when it comes to their emotional well-being. “I refer clients for therapy if the level of emotion, anxiety, or stress is overwhelming – which is almost all the time. It’s when people say they don’t need it that you should run fast the other way. Yes, it makes case management difficult. Common themes are: ‘I just want it over with’ or ‘If I concede x, y or z, my spouse will be nicer to me and/or the children’ or ‘It’s okay for my spouse to give me less as he or she will then pay for college or buy the kids a car.’ Decision-making made from an emotional place is generally a decision that may be regretted in the future. Therefore it’s important to write ‘CYA’ letters.”
Ah, yes, the old CYA letter. Anderson concurs that putting everything in writing is extremely important. “Written documentation of the client’s decisions can certainly help protect the lawyer against a future malpractice claim. There is another reason to do it – client service. It elevates the importance of the decision for the client, hopefully encouraging some serious soul searching. You’re telling your client, ‘hey, this is a critical decision so pay close attention’. This is especially true when the client chooses not to follow your advice.”
Anderson says fee disputes are another issue that may ripen into a malpractice claim.
“We’re currently working on several claims involving fee disputes in family law matters. One of them involves a counterclaim from the client after the lawyer sued for fees.”
Phillips says client-screening practices are the single best way she avoids fee disputes. “I’ve learned to some degree to see a fee dispute coming. The client must have a realistic view of the bills ahead, or the relationship can really be headed for disaster. The client I am looking for is someone who doesn’t want the cheapest lawyer in town. They want someone who is extremely responsive and respectful of their goals and priorities.”
Meyers says good client selection can make a difference, not just with fees, but with the overall case and her ability to represent the client. And she uses her staff to help. “If the paralegal or legal assistant gets a ‘bad vibe,’ for example, pushy, patronizing, dismissive, or demanding, we take it seriously and might not let that person in the door. If there are CCAP entries showing multiple attorneys having represented the potential client in a family law case, we are usually not interested. If the client cannot come up with a retainer, we will usually not take the case.”
Meyers adds that a client with potential mental health issues can also be troublesome. “If the client appears to have some serious mental health issues, we will think long and hard in deciding whether we are up for the challenge. After all, all people need good attorneys. But they are so difficult and frustrating sometimes and can really burn us out.”
When considering fees, Wexler adds that it is important to get a big enough retainer at the beginning of the representation. “Withdraw if ethically permissible before the unpaid fees get too big. This is a big deal for a sole proprietor – so, to me, unpaid fees that are $2,000 or so prompt a serious analysis of fishing or cutting bait. Get a consent and guaranty if you know the client can’t pay but will be getting help from friends or family. I always tell folks I’m happy if they pay something, consistent with their ability, every month. I don’t charge interest and sometimes I get $25 per month. When folks agree to do this, and then don’t do it, I try a consent and order for judgment, which, I then tell them, I will not docket if they pay what they can every month. I rarely sue anyone, but if none of these tools work, I will.”
Even with those precautions, Wexler says it doesn’t always work out. “I was recently stiffed $10,000 by a client who was in his 20s, as well as his father, who was his guarantor. The kid had nothing and the dad filed for bankruptcy. There were a series of continued hearings over a short period of time – the father said he would pay ‘at the next hearing’ but didn’t. I even got a great result – the return of young children from California.”
Meyers says her firm very seldom sues for fees. “We try to avoid that position by being very upfront about fees as we go. We bill monthly – always. That way the client can see how expensive it is getting. If the retainer is depleted, we usually have a discussion at that stage about how the fees will be paid going forward. We are pretty flexible about payment arrangements, which I think helps clients and helps them feel less stressed about the obligation, which is, frankly, usually substantial.”
With family law claims rising this year, Anderson cautions lawyers to pay attention to the details: carefully select clients, keep your eyes open for any potential fee disputes, put everything in writing, outsource work in which you do not have expertise, and make sure you identify and address your client’s expectations.
But most of all, communicate with your client.
Meyers agrees, and says that at the very least, when you cannot get back to your client because of other business, letting the client know he or she has not been forgotten can make a difference.
“I ask my paralegal and sometimes even the legal assistant to call, especially when I’m in all-day mediations or hearings. When they have someone to talk to, it usually helps. I also tell clients in the very first meeting that my availability can be limited and that I rely on a paralegal or an assistant to help at times.”
As Anderson says, “Many of the malpractice claims we see could have been avoided with better client communication.”