A while back we considered in a couple of entries the issue of eroding ethics in the legal arena: What’s Ethics Got to Do With It? Part 1 and What’s Ethics Got to Do With It? Part 2. Apart from the regretful plunge in ethical behavior, another consequence of the well-documented and increasingly evident problem of lawyers failing to perform professionally is the liability risk they pose to management and their companies and firms.
The data shows clearly that malpractice and other claims against lawyers are on the rise, both in terms of number of claims and the extent of the damages sought. In a poll of six leading insurers, four of them reported increases of 6% to 20% in legal malpractice claims, according to Ames & Gough Insurance and Risk Management, a specialty-insurance brokerage. "Evidently many law firms have expanded their insurance coverage to guard against claims from former employees or disgruntled partners and are looking to shield firm leaders from suits over management decisions, such as whether to merge with other practices." Think Chairman Steve Davis and his fellow managers in the complex interplay of mismanagement charges and countercharges being played out now in the Dewey & LeBoeuf bankruptcy.
Here is the twist that poses such a major risk for most law firms and law departments today. Extensive literature shows how compromised–not only by lapses in ethical behavior but also by mental dysfunction–lawyers are, both as a group (with in some cases as many as 1/3 of practicing lawyers documented as suffering from some sort of significantly disabling distress, like substance abuse, depression or other mental disability), and in individual cases (see among many others cases "Ex-Sullivan Partner Gets Two Years," acknowledging "slight" mental illness).
Apart from the obvious question of whether you would want these significantly compromised lawyers to be representing you in your important legal matter is the issue of how managers can continue to avoid "The Lawsuit Whose Name We Dare Not Speak Part 1," as we termed it in an earlier entry. Because lawsuits that threaten to change legal workplace liability law continue to proliferate.
For example, there is an increasing tendency for courts to find legal managers strictly liable for any wrongdoing during their watch, whether or not they are aware of it (see "Feds Taking Aim at In-House Lawyers, Executives"). And a further willingness to consider holding managers liable for injury that is traceable to stress and other work-place conditions, like a bullying atmosphere.
In that case, a lawyer sued his firm for its macho culture, which he said was responsible for the firm firing him after his second child was born and he took time under the federal Family and Medical Leave Act to care for his children and mentally ill wife. In another incident, the battered girlfriend of a stressed-out partner may be the one suing the firm for the partner’s workplace pressure and the failure of the firm to identify or manage it.
"Did Overwork Kill Skadden Associate?" asks an article, reporting that an associate at Skadden was found dead in her apartment when she didn’t show up at the firm at 4am, as expected. The incident became "the law firm death heard around the Internet."
"[Lisa] Johnstone’s mother told a responding officer at the scene that her daughter had worked more than 80 hours a week and had ‘worked herself very thin.’ She was recently treated for dehydration and previously had an ulcer… Did the rigors of working at Skadden actually contribute to what killed Lisa Johnstone?” the Am Law Daily asked. One commentator pointed out: "The people we’ve spoken to in that office say that in the weeks prior to her death, Johnstone was pulling 100-hour weeks and was under intense pressure. Multiple sources tell us that she had her vacation cut short after being called back to work. Sources also report that Johnstone had shown some disturbing signs of overwork…." The potential lawsuit seems pretty obvious, and damaging to Skadden whether or not it would succeed.
The result of these trends seems to be an incendiary mix of an expanding potential for liability unfortunately coupled with the continued indifference by many legal managers to what might be causing this exposure and what can be done to contain it.
As we have pointed out before:
"The legal professionals in your firm have thoughts of suicide at a rate 4-20 times greater than the general public, depending on the source of data, and also have highly elevated levels of substance abuse and mental illness and other indices of distress. They are under extreme pressure to perform in a brutal market. and they have well-documented deficiencies in adaptability and stress management. Levels of anger and frustration are off the charts…Most law firms would fail miserably the recognized assessment which determines workplace environments that literally make employees crazy.
What can your firm do to avoid being one of the headliners when these lawsuits do occur?
A number of precautions can be taken. Interviewing protocols can be toughened up so that you have a higher assurance that incoming lawyers are entering with relatively stable coping skills and mental health. Reporting protocols can be set up within the firm to make sure that struggling attorneys are identified and supported. Firms can offer coaching and psychological services (confidentially) to help their lawyers cope with both the professional and personal stresses that make them vulnerable to debilitation. Guidelines can be established as to what behaviors constitute grounds sufficient for requiring lawyers to take a break or leave the firm. And you might check your insurance policy.
Remember, in these lawsuits, plaintiffs will not try to convince a jury there was a workplace environment like in those movies with Tom Cruise, where evil, even satanic partners work their maleficent intent on their own lawyers. What they will show is the indifference of management to clear and convincing data on the vulnerabilities of its lawyer population, the thoughtless promulgation of requirements like unreasonable performance measures likely to destabilize such a vulnerable population and the failure of management to attend to clear signs that the lawyer in question is in distress—absences, family problems, mistreatment of staff or subordinates, irrationality, emotional imbalance, substance abuse. Just the sort of things most firms and law departments would rather not know about their lawyers–and studiously ignore when they happen to find out."
An ounce of prevention…