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El Segundo California Legal Malpractice Blog

Conflict of interest top source of legal malpractice claims

People in California rely on attorneys to follow certain standards of care when representing them. Attorneys who fall short of the standards of care established for their practice areas might commit professional malpractice. To prove malpractice, a plaintiff needs evidence that the attorney had a duty to meet the standard of care on behalf of a client but failed to deliver services according to these standards. The plaintiff must then show that damages resulted from these specific professional failings. A survey of legal malpractice claims by a malpractice insurance broker showed that conflicts of interest were the leading source of malpractice complaints.

Merging legal firms and lateral hires within the profession created almost 50% of the claims processed by insurers in 2017. The insurers found that insufficient training about conflict of interest issues among attorneys in these situations typically caused the problem. Law firms also often failed to conduct thorough investigations into the potential for conflicts of interest.

High-profile Hollywood malpractice claim settled

A major lawsuit between Hollywood celebrity Johnny Depp and his former legal representation was settled in California for an undisclosed amount. Depp had earlier sued his lawyers for $50 million, claiming legal malpractice. The case against the law firm emerged from Depp's previous claim against his former business representatives, TMG. Depp claimed that he had never had a clear contract with his lawyers and had paid excessive fees over years of representation. He also claimed that his lawyers had worked with TMG for their own financial benefit and contrary to the interests of Depp, their client.

The lawyers denied the allegations, but the malpractice litigation led to the retirement of one of Hollywood's longest-serving entertainment attorneys. The firm's attorney said that it settled the case for "a fraction" of Depp's demand, saying that the settlement was necessary to continue its winding-down plans. He also claimed that the firm continued to be confident of a positive outcome had the case reached trial. On the other hand, Depp's attorney claimed that the case ended with an "eight-figure" settlement, indicating that the former firm was eager to settle the case after a negative preliminary decision in court.

Hollywood producer files legal malpractice lawsuit

The State Bar of California's Rule 1.7, which is often referred to as the "Hot Potato Rule," states that attorneys in the Golden State are not permitted to represent a client if that representation would adversely affect another client unless the affected client gives them express written consent. A Hollywood producer says that her lawyer violated this rule when taking on a production company. The producer alleges in a lawsuit filed in Los Angeles on Oct. 18 that her attorney admitted to the conflict of interest and then dropped her as a client.

The plaintiff, who spent 20 years producing the "Oprah Winfrey Show," claims in her lawsuit that her attorney negotiated contracts on her behalf with production companies that she also represented. The producer says that the ensuing agreements were detrimental to her but beneficial to the production companies. The lawsuit also names the production company as a defendant.

Investment firm bankruptcy returns to malpractice issue

The trustee for a defunct investment firm in California is accusing a law firm, O'Melveny and Myers, of legal malpractice. The trustee is urging a judge to set aside an arbitration award that found that the firm did not commit malpractice while it represented the investment company, Aletheia Reseach and Management. The company's estate trustee for its bankruptcy filing says that the large law firm left the investment company with millions of dollars in losses as a result of alleged errors and misconduct during its representation. In particular, the trustee alleges that joint representation of the company and its founders created a damaging conflict of interest.

Experts note that the trustee will face a difficult battle in attempting to convince a judge to overturn the arbitration award. The arbitrator determined that the firm did not violate conflict of interest rules when it defended both the founders and Aletheia in a lawsuit by another investment company between 2009 and 2012. The other firm, which owned a 10% share of Aletheia, accused the founders of enriching themselves by "fleecing" Aletheia through excessive compensation. While Aletheia later settled the case and agreed to pay the other firm over $21 million, it then filed for bankruptcy protection in 2012.

Understanding the foundation of a legal malpractice lawsuit

When a California resident hires an attorney, professional behavior is expected. Mistakes happen, but when those mistakes are egregious enough, it could be the basis for a legal malpractice lawsuit. When confronted with legal mistakes, it is important to know what is and what is not legal malpractice and whether a legal filing is justified.

If an attorney is believed to have made errors, there are three factors to assess for a legal malpractice lawsuit. One is negligence. Examining the perceived mistake and gauging whether it made sense at the time or was a clear error can be the key. If the attorney adhered to the basic standards in serving the client, a mistake might not be enough for a legal malpractice claim.

When is an attorney disbarred?

Whether an attorney has been cited for legal malpractice or has been reprimanded for committing a crime, he or she runs the risk of losing their license to practice law. When attorneys pass the state bar exam, they are able to practice law in that state. They also take an oath to uphold the state and federal laws of the United States and to serve their clients to the best of their abilities. A failure to do so may result in disbarment, which takes away the ability to practice law in that particular jurisdiction. 

What types of activities may result in an attorney disbarment? Attorneys are expected to uphold ‘fiduciary duty’ when caring for their clients. This means that attorneys use a high standard of care when representing clients and puts the client’s interests before their own. After attorneys receive verbal warnings, written warnings and a suspension of their license, they may lose their license to practice permanently. Other activities that may lead to disbarment include the following:

Common legal malpractice claims

People make mistakes all the time. But, when you hire a licensed professional such as a lawyer, you expect them to know the details and to guide you through the process. When a mistake is made, the damages can be amplified for you and the lawyer.

Before going any further, it is important to know what exactly legal malpractice means. The definition of legal malpractice is the failure of an attorney to meet the accepted standards of practice, which results in damages, injury or loss.

Is denying a case considered legal malpractice?

You may assume that when you interview an attorney and decide you would like to work with him or her, the attorney’s job is to accept your case without question. If your prospective attorney decides to decline taking you on as a client, you may understandably be confused and upset. However, is it legal malpractice if an attorney refuses to accept your case? You and other California residents may want to know the answer.

According to the American Bar Association, lawyers are held to a high standard when it comes to accepting cases. They are advised not to accept a case if they are unable to represent a client efficiently and competently, if they might not be able to complete the case or if there would be a conflict of interest. Some reasons an attorney or firm may decide to pass on your case would include the following:

  • They feel your case does not have a strong chance of winning.
  • There is a concern you might not be able to pay their fees or the recovery amount would be insufficient.
  • The circumstances surrounding your case may tarnish their reputation or give them bad publicity.
  • They believe you may be difficult to work with or feel your partnership just does not click.

My attorney missed a deadline. What now?

In accordance with California state laws, when you are preparing a case to go to court, you will have to meet plenty of deadlines. There are deadlines for when you need to have certain paperwork filed, when you have to report to court, or when information must be reported. All of these deadlines are crucial. So what happens when your lawyer misses one?

As FindLaw states, one of the biggest driving causes behind a legal malpractice case is when an attorney misses a crucial deadline. Deadlines are so important that it can literally mean the difference between your case continuing to progress to a court and being dropped. Legally, your lawyer has an obligation to represent you skillfully. In order to do this, they need to have an acute awareness of any and all deadlines. They must be on top of when things are due and turn everything in on time.

Is this a mistake or malpractice?

Californian residents like you who have been let down by your legal professional may be wondering whether or not their mistakes would be enough to be considered malpractice. We at Lange Law Corporation will take a look today at what differentiates mistakes from malpractice.

First, you must be able to prove negligence. It is undeniable that attorneys can and do make mistakes at times; they are only human, after all. While it can be tempting to judge an attorney's actions and decisions harshly with the added benefit of hindsight, it is important to remember that attorneys are just regular people like anyone else. Not every mistake they make will be enough to be considered a breach in their duty of care.

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