So, as it stands, I'm attempting to supplement my document review with a solo practice until document review supplements a solo practice. There's no glory in this. It's what I have to do to stay pertinent to the current market. As I stated before, I'm pretty convinced that law firms will not be hiring full time employees with benefits anytime soon and I'll be damned if I sit there and hope for temp projects as they are slowly shipped to India. I have more pride than that.
So, the costs are mounting. I had to buy office supplies. A better printer with a scanner. A file cabinet will be next on the list. I bought letterhead and business cards. Hence far, the costs have been minimal.
But there's one hurdle that I need to jump--legal malpractice insurance.
I did a little search on-line and the costs were crazy... over $1000 a year with $5000 and $10000 deductibles. So, I got in touch with someone that I knew through someone (I've been pushing that networking thing, Managing Partner) And she had the best rate I have heard of hence far.... $900 a year!
And she also went on to tell me that it goes up every year (one would think you'd be less of risk with more experience).
This brings me to my point... what is the worst that would happen?
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Good luck, Angel! Nice graphic pic to go with the story.
ReplyDeleteSpeaking of Upton Sinclair, I think this quote best exemplifies why law school administrators and the ABA defend this corrupt system that produces a glut of attorneys:
"It is difficult to get a man to understand something when his job depends on not understanding it."
The worst that can happen w/o mal insurance? It depends. Do you own a home? Have any non-retirement accounts? If not, you are probably judgment-proof.
ReplyDeleteThe reason the cost goes up is because as you gain in experience, you ostensibly have a larger and larger pool of people (aka former clients) who could sue you.
This is the one thing I like about my state -- the state-mandated mal insurance is spendy ($3Kish a year) but it's the same for everybody. No shopping around, no shockingly large increases in the premiums. I purchased my own mal insurance in the previous state where I practiced and it was a HUGE PITA (because in addition to never knowing how much you are going to be charged, the insurance company tells you what types of cases you can and cannot take). Here I just pay my money, pretty much the same amount every year, and I can do whatever I want.
What’s the worst that could happen:
ReplyDeleteUnfortunately, my own experience is limited, but I can absolutely see where (and sort of why) malpractice insurance goes up – as you learn more, there is increased chance that your clients will learn of something you did previously that no longer works. Alternatively, as you grow your book of business, the chances that you will devote less time to researching the law from the ground up on a particular issue increases (e.g. you will not look up the current state of law on issue X if you’ve done work for 19 clients regarding issue X in the last year, creating risk if you fail to catch a new wrinkle in the law). Over time, you’re also more likely to hire additional staff or an associate, who will present greater risk as you train them (hopefully) and they learn some of what law school ignored.
Or so my adjuster friends explain (with minimal specifics, naturally).
Best of luck to you.
-Ford
Good luck, Angel! It takes a lot of guts to go solo. I could never do it. But as you've said, what other choice do you have besides temping for the rest of your life?
ReplyDeleteI'm not judgment proof.... Unfortunately and fortunately. But what is the likelihood that I'll be sued. Hmmmm.
ReplyDeleteThe insurance they are offering through LH Brenner Insurance and Hanover Professionals is well-priced. There is an Essentials program which is really good depending upon your state and practice area, at least to get you started. I've heard it can be as low as $400 for the first year. Worth checking out.
ReplyDeleteAnd if your state allows you to go bare, it may be worth it until you are earning more money THEN get insurance paying a premium for retroactivity to date of first client.
Wow! Thanks! THAT is really good advice.
ReplyDeleteIf you do "go bare," make sure you know your state's rules, if any, on disclosure. California, for example, either considered or adopted (can't remember) a rule recently requiring lawyers to disclose to their clients if they do NOT have malpractice insurance.
ReplyDeleteCrap, I don't know how to edit my last comment. To add "what is the likelihood I'll be sued" is not something I would gamble on if I wasn't judgment-proof. My very first client when I left Biglaw turned out to be BSC, and even though I went above and beyond I sweated over my stupid decision to take the matter until the statute of limitations expired! Ya just never know about people, and with the economy the way that it is I would never underestimate a plaintiff's ability to find a starving lawyer to take the case.
ReplyDeleteFunny, my not having malpractice insurance hasn't stopped people from wanting me to be their lawyer. I always mentioned that to people & put it in retainer letters when I actually represented anyone as a lawyer.
ReplyDeleteMalpractice insurance for entertainment lawyers is SUPER high; when I tried to get it, I was quoted $2500 a year when I'd been working for 1 year. I'm trying to see if my company will get that for me in the future but if I'm only doing legal work as a partner & as an employee in my day job (and plan to do one or both for a long time), my chances of being sued are probably much smaller. I also told people to have a more experienced lawyer around so I wouldn't screw things up & that I'm not working in a traditional lawyer-client capacity.
I'm extremely judgment proof unless things happen in either company I'm involved with. I also won't represent anyone unless I know them, I will get paid & it's under very limited representation since I'm not a full time, practicing lawyer.
Having attempted this myself, one piece of advice I will give is to make sure you like what you're doing. Also, get a separate business address & a business checking account. I'd also get a business line unless you want people knowing your personal number & to bother you at all hours.
For $900 per year, I would never go uninsured if I had any type of assets. That's penny-wise and pound-foolish.
ReplyDeleteDoug