Professional Liability Update
Managing Fee Suits to Minimize Professional Liability Risk
Suing for fees significantly sharpens the risk that you will face a claim for professional liability:
- The odds are about one in four that if you sue for fees, your client will file a counterclaim alleging professional liability
- In some practice areas, including real estate and family law, the likelihood increases to nearly 40%
- And in nearly every fee suit, the issue comes up in some form or another as part of a defense argument
Fee suits place you and your firm at risk for ethical challenges, professional liability claims, and business losses in the form of litigation expenses and lost attorney time that may very likely outweigh any potential recovery in court.
Consequently, some insurers have revised their policies to avoid perceived undesirable exposures concerning fee disputes. Firms that utilize fee suits may be unpleasantly surprised at the impact this event may have on the availability and cost of professional liability insurance. Contact your professional liability insurance broker to find out if fee suits are an exclusion on your current policy.
Tips to Reduce Fee Suits and Professional Liability Exposures
Through effective management of the entire "revenue cycle," from client intake through payment or collection, you can:
- Virtually eliminate the need to engage in the types of recovery actions that trigger malpractice suits
- Enhance your cash flow and profitability
Fee suits and lawsuits are avoided through communication with the client, good billing and collection practices, and timely, prudent business decisions on the part of the lawyer and the firm. The links below provide tips on how you can improve your cash flow while reducing your professional liability risk:
- Use an engagement letter
- Retool your invoices for added clarity
- Address delinquint accounts quickly and consistently
- Perform a cost/benefit analysis before filing a fee suit
The links below provide a more information and helpful checklists for eliminating the occurence of fee suits and reducing your professional liability exposure:
Call us today for a free review and analysis of your individual professional liability risk profile.