Matthew Henderson Discusses Factors Behind Spike in High-Exposure Legal Malpractice Claims

Hinshaw attorney Matthew Henderson discussed with Dan Packel of The American Lawyer the "striking number" of high-exposure legal malpractice claims that has accompanied a "torrent" of transactional work performed by international law firms since late 2020.

Henderson noted that spiking demand, overworked lawyers, and the remote work effects of the COVID-19 pandemic have together created a "perfect storm" conducive to legal malpractice claims. He also described the erosion of factors that previously made many clients reticent about bringing claims against their attorneys. Historically, general counsel who had relationships extending for multiple decades with law firms were more comfortable resolving disputes quickly and discretely via fee credits. But these relationships are now under greater financial pressure. Said Henderson: “They’re likely to pull the trigger even if it’s in a public forum, just because the stakes are so high.”

The changing nature of clients has also helped account for the shift in philosophies.

“Large law firms are handling matters for startup companies, fintech companies, and some of these more cutting-edge businesses that don’t necessarily have the same sort of corporate governance that a public corporation would. Those make for dangerous clients, as they often have some unrealistic expectations. These companies aren’t exhibiting a reluctance to sue. They don’t have those long-term relationships.”

Also quoted in the story are Willis Towers Watson senior vice president Kim Quarles and Williams & Connolly partner John Villa, who spoke on this topic with Henderson at the Hinshaw 21st Annual Legal Malpractice & Risk Management Conference (LMRM).

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"As Deal Work Flourished, High-Value Malpractice Claims Followed" was published by The American Lawyer, April 19, 2022

The article was referenced by Above the Law in an article titled "It’s A ‘Perfect Storm’ For Attorney Malpractice Claims."

The article was also mentioned in the April 19, 2022, Law.com The Morning Minute: "Deal Work Boom Leading to Legal Mal Boom."