We have Law Firms that hire a suspended attorney, one that was recently suspended, or had other disciplinary actions. While it is the firm’s prerogative to hire anyone they want, they should know about the disciplinary actions prior to making an offer. It is amazing that a trucking firm will check a driver’s MVR prior to hiring a trucker, but many law firms do not check the state bar for the attorney’s disciplinary issues.
Some of the recent issues are:
1. Law Firm hired an attorney that was currently suspended from the practice of law. Law Firm is slow to notify L Squared Insurance Agency about the hire and consequently the insurer is in the dark about the hire. About 3 months after the firm hires the attorney, firm finds out that the attorney is suspended from practice when the new attorney supplement is partially completed and then finally completed. Insurer at this point threatens to cancel coverage midterm or not renew and/or at the same time rescinding any coverage for attorney that is currently not licensed to practice law. This may force the firm that has never had a claim into surplus lines or at the very least a much higher premium. Also most malpractice policies have coverage exclusions for suspended attorneys.
2. Firm and insurer find out after attorney was hired that attorney had a suspension on their record. At renewal, law firm with no claims history is non-renewed because of the past attorney suspension. Firm is now in surplus lines with a much higher premium and less coverage.
3. Firm hires an attorney that had a number of “private” admonishments for notarizing documents that were not witnessed personally. Law Firm’s incumbent insurer does give renewal terms that are about 25% higher with a very high deductible.
4. Firm knowingly hired a suspended attorney as a paralegal. As the attorney is not currently licensed to practice, all is well as most insurers do not ask about hiring a paralegal. After a couple of years, attorney’s suspension ends and attorney malpractice insurer is promptly notified of new attorney on firm’s roster. Law Firm’s attorney malpractice insurer refuses to renew coverage. Firm is now in surplus lines.
It is normally a simple matter for a law firm to check the state bar website about the status and history of a new attorney. Checking up front will save the law firm from surprises with the legal malpractice insurance and premiums. Also aiding an unlicensed attorney to practice law for the firm can open the firm up to many other issues. There is a fine line between many functions of a paralegal and practicing law.